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Eddie Yongming Wu will take over as acting chairman and CEO of the cloud unit, and will also take over as CEO of the firm, effective immediately, Alibaba said in a statement released on the Hong Kong Stock Exchange.
Shares of the firm slumped over 3% after the announcement, dragging the broader Hang Seng index down 2%. The move was largely unexpected by markets, given that Zhang was set to lead Alibaba’s cloud unit as the company embarks on a six-way split in the coming months.
The firm said on Monday that it will continue as planned with spinning off the cloud unit with its own separate management team. The e-commerce giant had also flagged a potential listing for the unit.
Alibaba had announced earlier this year that Zhang would step down as CEO of the firm, as part of a plan to split its core businesses into six separate entities. Zhang was originally intended to lead the cloud unit after the split, which is also set to seek a separate listing.
Zhang had joined Alibaba in 2007, and had played a key role in the company’s wildly successful “Singles Day” shopping event. He was appointed as CEO in 2015, and took chairmanship in 2019, succeeding co-founder Jack Ma in both roles.
A Reuters report, citing an internal letter, said that Zhang will still work with Alibaba, and that the firm will invest $1 billion in a technology fund established by Zhang.
Alibaba’s six-way split was largely seen as a means to appease Chinese regulators, who had harried the company over the past three years with a string of anti-trust fines and investigations.
But the regulatory climate in China now appears to be improving, especially as the country taps into its biggest internet companies to help stimulate a slowing economic recovery.
