Alibaba Cloud CEO Daniel Zhang Steps Down

China’s Alibaba Group says the head of its cloud unit — and ex-CEO — will resign.

A report Sunday (Sept. 10) by Reuters notes that the departure of Daniel Zhang is a surprise, as he had left his role as the company’s chairman and CEO two months ago to focus on Alibaba’s cloud business.

The report cites an internal memo seen by Reuters. Zhang had planned to give the title of group CEO to Eddie Wu, who will now also take over the cloud unit, the letter reportedly says.

“The board of our company expresses its deepest appreciation to Mr. Zhang for his contributions to Alibaba Group over the past 16 years,” Alibaba said in a statement.

The report notes the cloud unit is the largest cloud provider China. It is due to be spun off from Alibaba as the company restructures.

Alibaba announced in March that it would become a holding company, splitting its myriad operations into six different businesses, focused on areas like cloud, media and logistics. Another company, the eCommerce firm Taobao Tmall Commerce, will remain wholly owned.

“Of critical importance, as signaling the change that’s afoot, CEO Daniel Zhang wrote in the announcement of the split that the opportunity will be there for the units to pursue ‘independent fundraising’ and IPOs,” PYMNTS wrote at the time.

One of those potential IPOs is now apparently on hold.  Alibaba decided to hold off on an initial public offering (IPO) of its grocery chain, Freshippo, in Hong Kong because of waning sentiment for consumer stocks.

The firm had initially aimed for a valuation of $6 billion to $10 billion, but following discussions with potential investors, Alibaba came to the decision that Freshippo could achieve a valuation of around $4 billion in the listing, the report said, citing unnamed sources.

Alibaba’s capital management committee, which is overseeing the breakup of the company, has decided to wait for a more favorable market before moving forward with the Freshippo IPO, and will instead turn its focus to listings of other units.

The report noted the delay could mean that Alibaba will fall short of its target to float Freshippo by May of next year, though it’s still possible the listing could proceed if China’s retail environment improves.