Alibaba Group Holding Limited (NYSE: BABA) shares experienced a 2% drop in pre-market trading on Tuesday following the announcement of a significant management reshuffle. The Chinese e-commerce giant aims to stimulate its growth amidst a slowing Chinese economy, despite the lifting of COVID-19 restrictions several months ago.
In a statement released today, Alibaba announced that Eddie Wu, the current chairman of its e-commerce group, will take over as the new CEO, succeeding Daniel Zhang. Zhang, on the other hand, will assume the role of CEO and chairman of Alibaba’s cloud computing unit. This unit has received approval for a spin-off and is expected to be listed for trading within the next year.
Joseph Tsai, the current executive vice chairman, will become the new chairman of the Alibaba Group. Tsai is a Taiwan-born Canadian citizen who co-founded Alibaba in the late 1990s. He is also well-known as the owner of the NBA basketball team, the Brooklyn Nets.
The management changes will officially take effect on September 10th.
Zhang became the CEO of Alibaba Group in 2015 and took over as chairman in 2019, succeeding Alibaba co-founder Jack Ma.
Commenting on the reshuffle, Zhang stated, ” This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses towards a full spin-off.”
“I look forward to working closely with Joe and Eddie in the coming months to ensure a seamless transition,” he added.
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
