TikTok Lays Off Staff After Shopping Feature Misses Growth Goals

Published: July 6, 2025

TikTok Lays Off Staff, yes, TikTok, one of the world’s most popular social media platforms, has begun laying off staff after its e-commerce feature, TikTok Shop, failed to meet expected growth targets.

The company had high hopes of transforming the app into a robust shopping platform, particularly in the U.S., where online shopping is a massive industry.

But things didn’t go as planned. Despite offering discounts, free shipping, and promoting products through influencers and live streams, the shopping feature failed to attract a sufficient number of buyers.

These layoffs indicate that TikTok is facing significant challenges in converting its success with short videos into a robust online shopping business.

The move also comes at a time when the company is under pressure from new U.S. laws and global trade tensions.

Table of Content

TikTok Shop Didn’t Grow As Expected
TikTok Lays Off Workers and Changes Teams
Trade and Legal Issues Making Things Harder
1. Live Shopping Is Not Working Well in the U.S.
What TikTok Plans to Do Next
1. Main Points to Remember
Final Thoughts
FAQs

TikTok Shop Didn’t Grow As Expected

TikTok introduced TikTok Shop to go beyond just entertainment and enter the world of online shopping.

The company hoped that this new feature would become as successful in the U.S. and other Western countries as it already is in Asia. But things didn’t go as planned.

In 2024, TikTok Shop in the U.S. made around $9 billion in total sales. While this is a considerable number, it was still far less than the company’s internal goal of $17.5 billion.

Most users in the U.S. didn’t shop as much through the app, and live shopping (where people buy during live videos) was also not very popular.

Only a few live videos have crossed the $1 million sales mark.

TikTok Lays Off Workers and Changes Teams

Due to the underperformance of the shopping feature, TikTok has laid off many employees. This is the third round of layoffs in its e-commerce division.

People working in areas such as product development, online seller support, and content moderation were affected.

Many of these layoffs occurred in cities such as Austin and Seattle, as well as in other countries.

Some employees were allowed to leave quietly through performance reviews, while others were terminated directly.

The company stated that it is doing this to “streamline operations,” which means they aim to reduce the team’s size and increase efficiency.

Now, many of the jobs that were once based in the U.S. are being moved to TikTok’s other offices in Singapore and China, where its parent company, ByteDance, is based.

Trade and Legal Issues Making Things Harder

TikTok is also facing outside problems that are making things more difficult. New tariffs (extra taxes) between the U.S. and China have made it more expensive to move products.

On top of that, a new U.S. law requires ByteDance to sell TikTok’s U.S. operations by September 2025, or the app could face a ban.

These issues have made it difficult for the company to grow and maintain the stability of its plan.

Shoppers and businesses are uncertain about the future of TikTok Shop, so many are waiting to see what happens.

Live Shopping Is Not Working Well in the U.S.

Live shopping, where people sell products through live video, has been very successful for TikTok’s version in China (called Douyin).

However, in the U.S., it hasn’t gained traction. Less than 10% of sales in the U.S. originated from live shopping, and only a handful of live events generated over $1 million in sales.

This is one of the big reasons the company is reviewing its shopping strategy. People in the U.S. shop differently from those in Asia, and TikTok needs to adjust to those habits.

What TikTok Plans to Do Next

Even though the company is laying off employees and missing growth targets, TikTok isn’t giving up on online shopping.

It plans to focus more on efficiency, cost-cutting, and developing strategies that work better for different regions, such as the U.S. and Europe.

TikTok may also modify its product promotion strategies, enhance user experience, and explore more effective methods for collaborating with creators and sellers.

Main Points to Remember

TikTok is laying off staff because its shopping feature didn’t meet expectations.
TikTok Shop in the U.S. generated $9 billion in 2024, falling short of its $17.5 billion goal.
Jobs in the U.S. are being cut or moved to teams in China and Singapore.
Trade problems and U.S. laws are causing even more trouble.
Live shopping isn’t working well in the U.S., unlike in Asia.

Final Thoughts

TikTok Shop is one of the company’s biggest bets to grow beyond short videos. However, this recent news highlights the challenges of making online shopping a success in every country.

TikTok is now reevaluating how it can enhance its shopping business, while also navigating legal regulations and competition.

Whether TikTok can address these issues and win over shoppers in the U.S. remains unclear. However, this is a significant moment for the platform, and many are watching to see what it does next.

FAQs

Why did TikTok lay off its employees in 2025?

TikTok laid off staff because its shopping feature, TikTok Shop, did not meet the company’s internal growth and sales targets. Despite heavy investment, the feature struggled to attract U.S. buyers. The company decided to cut costs and restructure its e-commerce team. This was part of a broader effort to improve efficiency and refocus on long-term goals.

How many employees were affected by the TikTok Shop layoffs?

While TikTok has not shared an official number, reports suggest that dozens of employees were laid off across different departments. These include roles in seller support, product development, and content moderation. Most of the affected staff were based in the U.S., especially in Austin and Seattle. Some global positions were also impacted.

What is TikTok Shop and why did it fail in the U.S.?

TikTok Shop is a feature that allows users to purchase products directly through the app, often during live videos. It has been very successful in Asia but has failed to gain the same level of interest in the U.S. Many users were not interested in live shopping or did not trust the platform for making purchases. As a result, sales and user engagement stayed lower than expected.

Is TikTok planning to shut down TikTok Shop in the U.S.?

No, TikTok is not shutting down TikTok Shop in the U.S., but it is changing its strategy. The company is focusing on cost-saving, improving the user experience, and localizing its approach. Instead of rapid growth, TikTok now aims for sustainable progress in e-commerce. The platform is also shifting more leadership to its international teams.

How are U.S.–China tensions affecting TikTok’s shopping business?

Trade tensions and new tariffs between the U.S. and China have made it harder for TikTok to operate its shopping business. A U.S. law now requires TikTok’s parent company, ByteDance, to sell its U.S. operations or face a possible ban by September 2025. This uncertainty has affected business planning and customer trust. It has also led to reduced investments and internal changes.

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