TikTok's E-Commerce Business Faces Layoffs Amid Strategic Restructuring

TikTok’s parent company, ByteDance, is reportedly preparing for a new round of layoffs affecting its global e-commerce division, TikTok Shop. This follows a memo sent to employees, indicating “organizational and personnel changes” within the company’s e-commerce team. With TikTok Shop already enduring several layoffs this year, this latest development raises significant questions about the stability and future of the platform’s e-commerce operations.

TikTok’s Memo and Recent Challenges

In a memo viewed by Business Insider (BI), TikTok outlined a series of personnel changes aimed at enhancing the efficiency and long-term growth of its e-commerce division. The internal communication emphasized that the adjustments were based on a “careful analysis” of operational models designed to streamline the team’s effectiveness moving forward. TikTok’s e-commerce team has faced numerous obstacles in 2024 and 2025, including unmet performance targets and disruptions caused by external factors, such as new tariffs imposed on Chinese goods by the Trump administration.

The changes at TikTok come as the platform’s e-commerce operations have been under increased scrutiny from ByteDance. In early 2024, TikTok’s leadership acknowledged that the US-based e-commerce team had not met expectations. The situation worsened with a significant tariff hike in May 2025, which impacted Chinese suppliers who form the backbone of TikTok’s global seller base. As a result, the company began reducing its workforce through layoffs, offering performance-improvement plans or severance packages to impacted employees. Furthermore, leadership positions previously held by US-based staff are now being filled by experienced executives from Douyin, TikTok’s Chinese counterpart.

This internal restructuring also occurs amid growing concerns regarding TikTok’s future in the United States. In 2024, the Trump administration passed a law requiring ByteDance to either sell its US operations or face the possibility of a ban. While the enforcement of this law has been delayed through executive orders, the ongoing uncertainty surrounding TikTok’s legal standing has been weighing heavily on staff morale, with some employees expressing frustration over the lack of clarity about the company’s future.

What Undercode Says:

TikTok’s ongoing e-commerce struggles come as no surprise, considering the rapid expansion and growing pains that accompany the integration of e-commerce into a platform initially designed for entertainment. TikTok Shop, though promising, faces unique challenges, particularly in its attempts to integrate seamlessly into a market where established players like Amazon and eBay dominate. While TikTok has a massive user base, converting this audience into dedicated buyers has proven challenging, especially with the additional burden of global trade disruptions and regulatory scrutiny.

The decision to replace US-based leadership with executives from Douyin could also signal a shift in TikTok’s strategic direction, with ByteDance potentially seeking to centralize its e-commerce operations to better align with the business model of its Chinese counterpart. By tapping into the expertise of Douyin’s leadership, TikTok may be attempting to replicate the success of Douyin’s thriving e-commerce market, which is already highly integrated with its social media platform.

Additionally, the recent tariffs and trade tensions between the US and China exacerbate an already delicate situation. The reliance on Chinese suppliers for a significant portion of TikTok’s product catalog creates a vulnerable position as US regulations continue to evolve. The introduction of tariffs, which negatively affect the cost structure for TikTok Shop sellers, could further dampen the platform’s appeal to consumers in the US.

Looking ahead,

🔍 Fact Checker Results:

1. 2. The imposition of tariffs has affected the

ByteDance has expressed the need for restructuring to support TikTok’s long-term e-commerce goals, but this comes amid growing uncertainty about the company’s future in the US.

📊 Prediction:

Given the current trajectory, it’s likely that TikTok will continue to face turbulence in its e-commerce journey, particularly in the US market. The ongoing political and regulatory issues surrounding ByteDance and TikTok will play a critical role in shaping the platform’s ability to scale its e-commerce business. It’s possible that we will see more leadership shifts and even further layoffs as TikTok attempts to refine its strategy and operational models. However, unless these internal struggles are resolved swiftly, TikTok Shop may struggle to compete effectively against established giants in the global e-commerce space.