In late March, Daniel Zhang unveiled what was called the “most significant” overhaul in the 24-year history of Alibaba, one of China’s premier tech conglomerates, splitting the company into six separate units that would help them to seek investors from the public.
Now, Mr. Zhang, the tech giant’s chairman and chief executive, has been removed from his post and will leave Alibaba’s board of directors, and two of the company’s co-founders have moved into senior roles.
Alibaba announced on Tuesday that Mr. Zhang, 51, would step down from his top job in September. Instead, he would only serve as general manager of Alibaba’s cloud computing division, a post he assumed in March when he unveiled the restructuring. Alibaba announced plans to spin off its cloud division in May, pending a public listing.
Joseph Tsai, 59 years old, an Alibaba veteran with roots in the company’s founding, will rise from executive vice president to president. Joining Mr. Tsai is another Alibaba co-founder, Eddie Yongming Wu, who will succeed Mr. Zhang as general director.
“It’s like the oldest of the old guard,” said Duncan Clark, chairman of investment advisory firm BDA China in Beijing. “The trusted team, the old guard, have regained control.”
The reshuffle comes at a critical time for Alibaba. The company was the most high-profile target of a Beijing crackdown on the power of China’s biggest tech companies. Its stock price has fallen since its 2020 peak.
Alibaba founder, billionaire Jack Ma, was thrust out of the public eye in 2020 after criticizing Chinese regulators for stifling innovation at Ant Group, Alibaba’s fintech sister company. After his remarks, Chinese officials suspended plans to sell shares of Ant Group in an initial public offering. In 2021, Chinese antitrust regulators fined Alibaba $2.8 billion for blocking merchants from selling their products on other shopping platforms.
Mr. Ma, a popular figure in China and long the face of the company, made a high-profile return to China earlier this year just as Alibaba announced its restructuring, which was seen in part as a response to tougher regulations from Beijing.
On Saturday, Ma made an appearance at a math competition sponsored by an Alibaba research division, according to a post on the institute’s blog. Although he no longer holds an official position at Alibaba, Mr. Ma remains one of its largest shareholders, with 4.5% of the company in 2021, according to company filings.
In a letter to employees on Tuesday, Mr. Zhang said it was time for him to devote his full attention to spinoff projects. He also spoke about the need for a clear separation between his roles at Alibaba and the cloud division.
Mr. Tsai, the new chairman, has a relationship with Mr. Ma that some former employees have described as inseparable. The two met in 1999, when Alibaba was still a free online portal, and Mr. Tsai joined the company that year. He helped Mr. Ma secure early investments from Goldman Sachs and SoftBank, and oversaw the company’s 2014 New York IPO, then the largest in history.
Executive vice president of Alibaba since 2013, Mr. Tsai is the principal owner of the Brooklyn Nets, the team of the National Basketball Association.
The rise of Mr. Wu, a longtime executive in Alibaba’s e-commerce division, told analysts that Alibaba would continue to prioritize online shopping as a central pillar of its business.
Mr Wu, who is in his late 40s, helped lead Alibaba’s transformation from an e-commerce giant to a mobile juggernaut, turning the digital payment app Alipay into one of the payment methods default across China. He will continue to serve as chairman of Taobao and Tmall, Alibaba’s two national e-commerce businesses.
Mr. Zhang told investors that Alibaba would become less centralized and more efficient by splitting its components. But Alibaba also recently announced the creation of a high-level committee to make decisions on distributing money to new business groups, which some analysts took as a sign that the company was still keep the power in the hands of a few key people.
Mr. Zhang succeeded Mr. Ma as chairman of Alibaba in 2019. Then a rising star in the company, he was the architect of Singles Day, Alibaba’s most successful business event. Known for his attention to detail and problem-solving abilities, Mr. Zhang was widely seen as a complement to Mr. Ma, who was known within the company for his visionary prowess.
Alibaba stands for online shopping in China. But the company has since expanded into a range of businesses from digital payments to delivery services to entertainment. In recent years, it has expanded its e-commerce division and served the AI boom with its cloud computing unit.
Jacob Cooke, chief executive of e-commerce consultancy WPIC, said bringing back Tsai, who has significant investments around the world, was a logical choice for Alibaba given its recent international focus.
Alibaba invested $1.6 billion in its Southeast Asian e-commerce business last year, according to corporate records in Singapore provided by research firm VentureCap Insights. And last week it announced plans to launch a local version of its e-commerce division, Tmall, in Europe.