ByteDance strictly addresses violations

Author | Liu Baodan

Editor | Zhou Zhiyu

In response to the widely circulated incident of an intern damaging model training, ByteDance has finally made a statement.

On November 5th, Wall Street Insight learned that ByteDance internally released its fourth "Corporate Discipline and Professional Ethics Committee Bulletin" of the year, stating that from June to July 2024, an intern in the commercial products and technology department, Tian, maliciously attacked the model training tasks of the team's research projects by writing and altering code due to dissatisfaction with team resource allocation, resulting in resource loss.

Regarding the losses incurred, ByteDance stated that previous reports contained some exaggerations and inaccuracies. The intern's malicious interference with the model training tasks of the commercialization technology team did not affect the formal commercialization projects and online business, nor did it involve ByteDance's large models or other businesses.

Additionally, concerning the claims of "involving over 8,000 cards and losses exceeding tens of millions of dollars," ByteDance stated that this was severely exaggerated.

Currently, ByteDance has terminated the internship agreement with the intern and has reported the matter to the Sunshine Integrity Alliance and the Corporate Anti-Fraud Alliance, as well as to the intern's school for handling.

The incident of the intern damaging model training is merely an isolated event, but it has also prompted ByteDance to strengthen its governance against corruption and violations.

At the annual all-staff meeting at the beginning of 2024, ByteDance CEO Liang Rubo stated that the keyword for ByteDance in 2024 is "always entrepreneurial, escaping the gravity of mediocrity." He repeatedly mentioned a "sense of crisis" and included "strengthening the sense of crisis" in the annual goals. "The greatest sense of crisis is the concern that ByteDance, as an organization, is becoming mediocre and unable to achieve new breakthroughs."

The bulletin shows that 103 people were dismissed for illegal and rule-breaking behavior (including outsourced and intern staff), among which 11 were investigated by public security authorities for suspected criminal offenses. In terms of the suspected charges, one person is suspected of embezzlement, five are suspected of bribery as non-state personnel, and another five have not disclosed specific suspected charges.

From the perspective of the involved businesses and departments, among the 11 individuals, three were involved in e-commerce, three in life services, two in Douyin, and one each in corporate services, human resources and management, and finance.

Behaviors seeking improper benefits through job convenience largely occurred during procurement and bidding processes. As disclosed in the bulletin, former e-commerce employee Xu, former Douyin employee Dong, and former corporate services employee Xu all sought benefits for suppliers during procurement and bidding, either by purchasing at prices significantly higher than market rates or by providing preferential resources to suppliers, and received kickbacks in return. All three have been investigated by public security authorities for suspected criminal offenses.

Leaking confidential company information was also a frequent occurrence mentioned in the bulletin, with Wang directly selling confidential company information to the outside world and being investigated by public security authorities for suspected criminal offenses.

The bulletin also specifically highlighted the responsibilities of managers. For managers who neglect their supervisory and approval responsibilities, the company will hold them accountable; for employees who violate criminal laws, the company will default to holding the direct supervisors of the involved employees accountable (except for managers who actively discover and report illegal activities) From 2019 to 2021, ByteDance rapidly expanded, with the number of employees increasing from over 10,000 to more than 100,000. Liang Rubo stated that many people have reported that ByteDance now has "all the ailments of a large company."

The intern incident that disrupted model training is just a reminder. ByteDance is at a critical stage of global expansion, and the competitive pressure domestically is also increasing. Against this backdrop, organizational combat effectiveness will determine ByteDance's performance in the new phase, which is also an internal tough battle