Zoom, the video conferencing giant that’s been growing rapidly during the pandemic, said Tuesday it was laying off 15 percent of its workforce, or about 1,300 employees, becoming the latest tech company to make cuts amid looming concerns about the economy.
Zoom CEO Eric Yuan cited the company’s rapid shutdown during the pandemic as well as “the uncertainty of the global economy” as factors behind the company’s decision to cut labor costs.
“We’ve worked tirelessly and improved Zoom for our customers and users,” he said wrote in a blog post on the company’s website. “But we also made mistakes.”
From July 2019 to October 2022, Zoom’s workforce grew more than 275 percent to 8,422 employees, according to filings with the Securities and Exchange Commission. As people isolated at home at the height of the Covid lockdown, many businesses and schools depended on Zoom to keep their operations running.
But like other companies that have thrived during the pandemic only to stumble as lockdowns ease, Zoom is struggling to sustain its growth. Its market value skyrocketed in late 2020 and surpassed $150 billion, but workers gradually returned to offices and “zoom fatigue“ added to the lexicon, the value of the company shrank. It’s now worth about $24 billion, not much more than it was in the months leading up to the pandemic.
“We have not taken as much time to thoroughly analyze our teams or assess whether we are growing sustainably, toward the highest priorities,” Mr. Yuan wrote in the note to employees on Tuesday.
Zoom’s shares jumped after the announcement of layoffs, up nearly 10 percent by the end of Tuesday.
A number of big tech companies, concerned about a slowdown in the overall economy, have also recently announced job cuts after hiring too many people during the pandemic. Microsoft has quit 10,000 workers cut in January and alphabet 12,000 jobs. Salesforce, Meta, Amazon and PayPal have also reduced their workforce. This week Dell announced that it would lay off more than 6,500 employees. In addition, media companies, including Vox Media And The Washington Posthave cut jobs.
Mr. Yuan said he would cut his salary by 98 percent for the upcoming fiscal year and forego his bonus. In Zoom’s last fiscal year, his salary was just over $300,000 and he received no bonus, according to the company Power of Attorney Form from May. Mr. Yuan is worth about $3.9 billion due to his sizable holding in Zoom stock. Forbes reports.
Zoom’s executive team’s base salaries will be cut by 20 percent for fiscal 2023 and will lose their corporate bonuses.
Employees affected by the layoffs will receive up to 16 weeks of pay and health insurance, their bonuses for fiscal 2023, and help finding a new job, according to the blog post.
