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- TikTok told some US staff that they will not work under a new joint venture run by Oracle and others.
- Instead, they'll switch to a new entity set up for workers in global business lines, like e-commerce.
- The move showcases how ByteDance will stay in charge of key parts of the US business after a sale.
TikTok is preparing to carve off parts of its US business, but not all US workers are joining the new entity.
Some US staff were told this week that they will not work for the new joint venture, called TikTok USDS Joint Venture LLC, led by managing investors Oracle, Silver Lake, and MGX. Instead, they will work for a separate TikTok global entity that will remain under ByteDance's ownership, called TT Commerce & Global Services LLC.
The change, outlined in a memo sent to impacted employees, includes workers who focus on US products that will remain tied to TikTok's global operations after the sale closes. In December, TikTok's CEO Shou Chew told staff those business lines would include "certain commercial activities, including e-commerce, advertising, and marketing."
Other US workers, such as those focused on data protection or algorithm security, would work under the USDS Joint Venture entity, according to Chew's memo. He said the deal would close on January 22.
TikTok and ByteDance did not respond to Business Insider's request for comment about the staffing change.
Why TikTok US is splitting up
If the proposed TikTok deal goes through, Oracle, MGX, and Silver Lake would each own 15% of the new US joint venture. Affiliates of existing ByteDance investors would get around 30%. Five percent would go to an unnamed group of new investors, and ByteDance would keep just under 20% of the business to comply with the ownership requirements of the US divestment law that sparked the sale.
The law, known as the Protecting Americans from Foreign Adversary Controlled Applications Act, requires companies based in countries the US has deemed a foreign adversary to divest from their US assets or face hefty fines.
Congress called out TikTok and China-based ByteDance in the law's text. TikTok challenged the law in court but lost its case in a Supreme Court ruling last January.
President Donald Trump allowed the app to continue to operate last year via a series of executive orders as his administration worked with TikTok and prospective buyers on a potential deal. In September, the White House announced a deal had been reached, which Vice President JD Vance said would value TikTok US at around $14 billion.
