Heads of operations Adam Presser and brand and communications Zenia Mucha informed employees that organizational changes would be communicated starting Thursday. These changes aim to boost efficiency for long-term growth. Unlike other tech giants, TikTok typically avoids large-scale layoffs, preferring performance assessments and smaller reorganizations.

The layoffs come as TikTok faces potential bans in the U.S. if it doesn’t sever ties with Chinese parent ByteDance by 2025. ByteDance has no plans to sell the app but has explored scenarios for a sale without the algorithm. Last year, TikTok employed 7,000 people in the U.S.

The layoffs indicate pressure to achieve profitability, with TikTok reportedly losing several billion dollars in 2023 despite generating $20 billion in revenue. ByteDance recorded nearly $23 billion in operating profit in the first nine months of 2023.

This reorganization has been in process for months, causing uncertainty and low morale among employees. In June 2023, V Pappas left the company, and CEO Shou Zi Chew appointed Adam Presser as head of operations and Zenia Mucha as head of brand and communications.

In November, Presser announced the reorganization, leaving many senior leaders without clear roles and causing further instability within the company.