ByteDance Ltd.'s TikTok is reportedly planning to lay off a significant number of employees from its operations, content, and marketing departments as it battles President Joe Biden‘s new law forcing it to either divest or be banned.
What Happened: The layoffs are expected to be announced on Wednesday night or Thursday morning, according to a report by The Information, citing unnamed sources. The exact number of employees to be affected is not yet clear.
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The company had previously laid off several employees at the beginning of the year. However, the scale of the current layoffs is unusual for TikTok, which has generally avoided large-scale layoffs and stuck to a measured pace of hiring, unlike other tech companies.
Why It Matters: This news comes amid a period of significant legal and regulatory challenges for TikTok.
The company is facing a divestment law in the U.S., which mandates its parent company, ByteDance, to divest TikTok’s U.S. assets by a certain date or face a ban.
TikTok and the U.S. Justice Department have requested a U.S. appeals court to expedite the legal proceedings regarding this law.
Prior to this, TikTok had refused to comply with the law, filing a lawsuit against the U.S. government and challenging its constitutionality. The company has made it clear that it will not be able to sell its algorithm, which is the primary concern of the U.S. government.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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