TikTok just announced plans to hire hundreds of new employees in Austin little more than a month before the company’s federally designated deadline to sell. The move represents a business play WeChat and other Chinese tech companies could take as they navigate the U.S. market in the future, according to journalist Ted C. Fishman, author of China Inc.: How the Rise of the Next Superpower Challenges America and the World.
“Grow your company to scale, seem threatening to the United States in some way, and then force a sale,” Fishman told Built In. “You basically get the United States government acting as your investment banker.”
He is confident that Microsoft, Twitter or another buyer will pay TikTok’s Chinese parent ByteDance “very, very well” for the American version of the short-video sharing app. But, just because ByteDance is forced to “cash out” a portion of the TikTok business doesn’t mean the company isn’t interested in tapping the U.S. talent pool, Fishman said. He anticipates that WeChat and other Chinese social media and tech companies will likewise build up their American presence before being forced to sell in the future.
UPDATE (8/17/20): Austin Business Journal reports that TikTok's hiring efforts in Austin are now on hold due to the Trump administration's executive order.
The Background
Last week, Microsoft announced that it was in talks to acquire the U.S. operations of the Chinese social media sensation, amid suspicion from President Donald Trump and senators on both sides of the aisle that the Chinese government is using the app’s data to surveil its users. Microsoft said the United States government is participating in the dealmaking, which must be finalized by September 15.
Yet a week later, TikTok announced a plan to hire “a couple hundred” new staff in Austin. The company opened an Austin office in March, and over the past year has tripled its national headcount to 1,500 employees, according to a TikTok spokeswoman. She declined to comment on the current size of the Austin office, but she said it will act as the company’s point place for coordinating its brand and advertising global business. TikTok is specifically looking to hire account manager, sales rep and support roles in Austin.
Blake Chandlee, TikTok’s VP of global business solutions, said the company plans to eventually grow its U.S. team to 10,000 people.
“The Austin community embodies the same creative and entrepreneurial spirit that defines the TikTok community,” Chandlee wrote in an email to Built In. “We are going to do all we can to ensure our company’s future in Texas and the U.S. Our goal is to be here for years to come.”
Will the Company Sell?
TikTok has spent the last few years trying to assure the international community that it does not share data with the Chinese government, which has been known to use user information to crack down on Uighers, Tibetan activists, Hong Kong protesters and more. Although TikTok has said it would refuse any such request, Fishman said “it’s impossible to see how they could keep that pledge.” The media company has also grown so prominent in the U.S. marketplace that its business practices could influence other spheres of American industry, he added.
“They’d like to tell the world that they want it both ways, that they’re going to have the best big global business practices outside of China, and that they’re going to be very loyal to government demands in China,” Fishman said. “It’s an almost impossible line to walk.”
Fishman said TikTok’s sale to an American company seems destined for the app, even as the company reportedly plans to sue the Trump administration over its executive order. But what Microsoft, Twitter, or another buyer will receive in return is unclear. Fishman credits the vague outlines of the business agreement, as well as the strong American talent pool and the company’s American CEO, with TikTok’s Austin hiring spree.
“Just because TikTok China is forbidden from doing business in the United States doesn’t mean that they’re no longer interested in getting U.S. talent to help make a better and better product,” Fishman said.
