In a surprising move, Alibaba, one of China’s original technology conglomerates, is experiencing significant leadership changes. Back in March, Daniel Zhang, the chairman and CEO, introduced a major restructuring that divided the company into six separate units, aiming to attract public investors. However, Zhang will now step down from his top position and leave Alibaba’s board of directors. Instead, two of the company’s co-founders will assume leadership roles.

On Tuesday, Alibaba announced that Zhang, aged 51, will relinquish his top job in September and solely focus on being the chief executive of Alibaba’s cloud computing division, a position he took on during the restructuring announcement. The company had already planned to spin off its cloud division for a public listing, a move unveiled in May.

Taking over as chairman is Joseph Tsai, a 59-year-old Alibaba veteran deeply rooted in the company’s founding. Another co-founder, Eddie Yongming Wu, will step in as the new chief executive, succeeding Zhang.

Industry experts view this reshuffle as a return to the old guard, referring to the trusted team that initially established Alibaba. It comes at a critical time for the company, as it has faced regulatory scrutiny and a decline in stock price following a crackdown on China’s major tech companies. Notably, Alibaba’s founder, Jack Ma, faced repercussions for criticizing Chinese regulators in 2020, and the company has since encountered antitrust fines and increased regulations.

Although Ma no longer holds a formal role at Alibaba, he remains one of the largest shareholders, owning 4.5 percent of the company as of 2021.

Zhang stated in a letter to employees that he intends to dedicate his full attention to the spinoff plans and stressed the importance of maintaining a clear separation between his roles at Alibaba and the cloud division.

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