China’s Alibaba sees shares tumble as outgoing CEO quits cloud business

China’s tech giant Alibaba has announced that its outgoing chief executive will also step down from its cloud business, sending the company’s shares tumbling.

Alibaba shares on Monday fell by 3.5 percent following the surprise announcement that CEO Daniel Zhang would not stay on to lead the e-commerce giant’s cloud business as planned.

Alibaba announced in June that Zhang would step down as group CEO to focus solely on leading the cloud intelligence unit.

Eddie Wu, who was set to take over from Zhang as group CEO and director in September, will now serve concurrently as chairman and CEO of the cloud business on an interim basis.

“The board of our Company expresses its deepest appreciation to Mr. Zhang for his contributions to Alibaba Group over the past 16 years, including as Chief Executive Officer since 2015 and as Chairman since 2019, as well as his leadership of Alibaba Cloud Intelligence Group since 2022,” Alibaba said in a statement to the Hong Kong Stock Exchange late on Sunday.

In a letter signed by Alibaba co-founder Joseph Tsai, the firm said Zhang had expressed his wish to transition away from his role leading the cloud unit.

“Following careful consideration, the Alibaba board respected and accepted Daniel’s decision and appointed Eddie as acting chairman and CEO of Cloud Intelligence Group, effectively immediately,” the company said.

The letter said Zhang would continue to contribute to Alibaba by “channelling his expertise differently”.

Zhang, who joined Alibaba in 2007, is perhaps best known for spearheading the company’s hugely popular Singles’ Day shopping festival since its launch in 2009.

The former accountant was appointed Alibaba chairman in 2019, taking over from the company founder Jack Ma.

Alibaba, which has its headquarters in Hangzhou, is one of China’s biggest and most influential tech firms, with operations spanning e-commerce, cloud computing, logistics, media and artificial intelligence.