Even as dealmakers bicker over who will really own TikTok Global, another query arose after President Donald Trump agreed over the weekend to maintain the exceptionally popular video-sharing app running at the United States for another week: how do they possibly create 25,000 new jobs in the US?
That vow, replicated by the president on Saturday in a campaign rally in North Carolina, was part of a concession which dealmakers offered to convince Trump to green-light a trade in which a new board comprised of American taxpayers would oversee a fresh US-based company and co-owned from Oracle Corp and Walmart Inc.
Nevertheless, the lofty hiring target will be challenging to justify, specialists said. Such a high number indicates an expectation for enormous revenue growth at a time when TikTok confronts unprecedented global challenges.
If TikTok worked at anywhere near the efficacy of other online companies such as Twitter, TikTok would have to create up to 19 times more earnings during the upcoming few years.
TikTok is expected to produce about a billion dollars in revenue at the end of 2020, journalists at our partner news agency Reuters previously reported.
Many of the new American jobs will probably be in engineering, content management and security roles, given that the US government’s extreme focus on the app’s data privacy policies,” said Dan Ives, a tech 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 explained.
TikTok recently announced a $1 billion founder fund which will pay popular TikTok influencers for creating movies. Counting these content creators would help TikTok achieve 25,000 jobs, stated Brian Wieser, global president of business intelligence in advertising agency GroupM.
Beyond that, it gets harder to warrant a bigger staff. Since ByteDance will still own the algorithm that runs TikTok and permit it to the new US-based business entity, the new firm will not need to employ large teams which work on artificial intelligence.
Those kinds of jobs account for a large chunk of Facebook Inc and Twitter’s headcount, said Abishur Prakash, a technical futurist in the Center for Innovating the Future, a technology and geopolitics consulting company, raising questions about what job roles TikTok could hire for.
Oracle and Walmart could also create divisions within their companies to function TikTok that could contribute to the work count,” he added.
A source familiar with the deal talks said the 25,000-job figure was based on similarly sized businesses that serve as many customers as TikTok, without providing details. The source added that the job figure was actually conservative in an effort to under-promise and over-deliver.
Another tech firm, Taiwanese electronics manufacturer Foxconn, promised in 2017 to deliver 13,000 new projects to Wisconsin. The deal to make a new factory in the United States was praised by Trump as the”eighth wonder of the world” and as evidence of his capacity to bring jobs back to America.
A filing with the Wisconsin state economic growth branch showed Foxconn employed about 600 people in 2019 in the area, according to a CNBC report.
The vision of TikTok’s hiring goals can better be understood by comparing it against the revenue that workers make for additional online businesses.
Normally, Twitter’s 4,800 employees each generated close to $720,000 or total annual earnings of $3.5 billion in 2019. Snap Inc’s 3,195 workers each created about $537,000, to get a 2019 annual amount of $1.7 billion.
ByteDance currently employs more than 1,000 employees in the United States, mostly in California with some in other places like Texas, Reuters previously reported.
Even in the low end, such earnings targets will be hard for TikTok, Prakash said.
“We’re in a different phase of TikTok… that comes with a lot of baggage,” he said, adding TikTok is still banned in India, which was previously its largest market. “It’s going to take them that much longer and be that much harder to reach 14x (revenue)”.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Sheila Dang in Dallas. Additional reporting by Stephen Nellis in San Francisco. Editing by Kenneth Li, Peter Henderson and Lisa Shumaker.
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