NEW YORK: Even as dealmakers bicker over who will actually own TikTok Global, another question emerged after President Donald Trump agreed over the weekend to keep the wildly popular video-sharing app running in the United States for another week: how can they possibly create 25,000 new jobs in the United States?
That vow, repeated by the president on Saturday at a campaign rally in North Carolina, was part of a concession that dealmakers offered to convince Trump to green-light a transaction in which a new board comprised of U.S. citizens would oversee a new U.S.-based company and co-owned by Oracle Corp and Walmart Inc, report agencies.But the lofty hiring target will be tough to justify, experts said. Such a high number suggests an expectation for massive revenue growth at a time when TikTok faces unprecedented global challenges.
If TikTok operated at anywhere near the efficiency of other internet companies such as Twitter, TikTok would need to generate up to 19 times more revenue over the next few years.
TikTok is expected to generate about a billion dollars in revenue by the end of 2020, Reuters previously reported. Many of the new American jobs will likely be in engineering, content moderation and security roles, given the U.S. government’s intense focus on the app’s data privacy policies, said Dan Ives, a technology analyst at Wedbush Securities. “From a security and infrastructure perspective, they’re going to have to hire a few thousand alone to focus on that issue...given the sensitivity,” he said.
TikTok recently announced a US$1 billion creator fund that will pay popular TikTok influencers for making videos. Counting those content creators would help TikTok reach 25,000 jobs, said Brian Wieser, global president of business intelligence at ad agency GroupM.
Beyond that, it gets harder to justify a bigger staff. Because ByteDance will still own the algorithm that runs TikTok and license it to the new U.S.-based company, the new company will not need to hire large teams that work on artificial intelligence.