Alibaba Group (9988. HK) announced Tuesday that CEO and chairman Daniel Zhang would step down to focus on its cloud division as the Chinese e-commerce behemoth splits into six business segments.

Zhang had held three jobs since December when he took over the cloud operation following its “longest major-scale failure” in over a decade.

Eddie Yongming Wu, Alibaba’s Taobao and Tmall Group chairman, will become CEO, while Executive Vice Chairman Joseph Tsai will become chairman.

Alibaba said both appointments will begin on Sept. 10.

The surprising shift occurred after two years of regulatory scrutiny and a March announcement that Alibaba would restructure into six units with their boards and CEOs.

Its China-facing e-commerce sector, which includes the Taobao and Tmall marketplaces, will remain completely controlled by Alibaba. At the same time, the other five units will be split off, with Alibaba indicating in May it planned to complete the public offering of its cloud company within 12 months.

Zhang told staff in a document seen by Reuters that the cloud spin-off was at a critical stage and that he should focus on it.

“From a corporate governance perspective, we also need clear separation between the board and management team as the Cloud Intelligence Group proceeds down the path to becoming an independent public company,” he said.

“It would be inappropriate for me to continue serving as chairman and CEO of both companies at the same time during the spin-off process.”

Analysts estimate the cloud unit’s value at $41 billion to $60 billion, but its vast data could draw regulators’ attention.

A former accountant, Zhang joined Alibaba in 2007 and created its “Singles Day” retail extravaganza. He became CEO in 2015 and chairman in 2019, after Jack Ma.

Alibaba praised Zhang’s “extraordinary leadership in navigating unprecedented uncertainties affecting the company’s business over the past few years.”

Analysts saw the shift as part of the restructuring. Thus Alibaba’s Hong Kong-listed shares plummeted 1.5%, and the benchmark index (.HSI) fell 1.6%.

“Under the new structure, the group will play a smaller role in setting strategies for the six business groups, so instilling Alibaba founders Joe and Eddie as chairman and CEO likely serves the purpose of ensuring smooth leadership transition and maintaining culture,” Shanghai-based independent analyst Eric Chen, who publishes on Smartkarma, told Reuters.

Alibaba said Wu, who co-founded Alibaba with Ma and Tsai 20 years ago, will remain chairman of Taobao and Tmall Group. Former Alipay CTO and Alibaba Health chairman.