TikTok Hits US eCommerce Division with Third Layoff Round
TikTok is initiating a third wave of layoffs within its U.S. e-commerce division, particularly affecting teams across its in-app shopping arm, TikTok Shop. According to internal communications reviewed by Business Insider, the company is restructuring to streamline operations and better align with strategic objectives, especially following underwhelming 2024 sales performance.
Despite the heavy focus on eCommerce in the west – something we’ve covered regularly due to how much focus TikTok poured into their own expansion – internal sources reveal that mounting tariffs on Chinese goods, which spiked as high as 145%, followed by a temporary reduction to 30%, have disrupted merchant interest and weakened order volumes. Alongside that, the constant scrutiny of the possible TikTok ban may have weakened its overall strength in the United States.
While TikTok Shop has seen encouraging growth – posting a 120% year-over-year boost in early June – the broader ambitions to replicate the success of Douyin, TikTok’s Chinese counterpart, have proved challenging. Douyin’s e-commerce segment achieved a staggering $490 billion in GMV in 2024. In contrast, TikTok Shop in the U.S. has fallen short of its goals, with structural and geopolitical hurdles weighing heavily on the operation.
In response, the company appears to be consolidating leadership, increasingly placing decision-making authority in the hands of executives from China and Singapore, including those with experience overseeing Douyin. These changes come amid a broader strategic pivot .away from U.S.-centric livestream commerce, with a renewed emphasis on short-form video shopping formats tailored to local market preferences
Despite these setbacks, TikTok remains focused on expanding TikTok Shop into more receptive markets. Japan recently became the 17th region to receive full shopping support, while TikTok continues promoting new campaigns and sales to try and get more users into the ecosystem. The new round of layoffs may simply be a recalibration—TikTok is refocusing its resources as it seeks to find a foothold in the competitive U.S. e-commerce landscape.
