Zoom, the video conferencing giant that grew rapidly during the pandemic, said Tuesday it would lay off 15 percent of its workforce, or about 1,300 employees, becoming the latest tech company to cut back amid looming concerns about the economy. .
Eric Yuan, CEO of Zoom, cited the company’s rapid hiring during the pandemic, as well as “the uncertainty of the global economy” as factors in the company’s decision to reduce labor costs.
“We are tirelessly working on and improving Zoom for our customers and users,” he said. wrote in a blog post on the company 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. When people were isolating at home during the height of the COVID-19 shutdowns, many businesses and schools became reliant on Zoom to maintain their operations.
But like other companies that flourished during the pandemic only to stumble when lockdowns were eased, Zoom has struggled to sustain its growth. Its market value skyrocketed in late 2020, topping $150 billion, but with workers gradually returning to offices and “Zoom fatigue” entering the lexicon, the company’s value dropped. It is now worth about $24 billion, not much more than it was in the months before the pandemic.
“We didn’t take as much time as we should to take a hard look at our teams or assess whether we were growing sustainably, toward the highest priorities,” Mr. Yuan wrote in the note to staff Tuesday.
Zoom’s shares rose after the layoffs announcement and were up nearly 10 percent at the close on Tuesday.
Several major technology companies, concerned about a slowdown in the broader economy, also recently announced staff cuts after overhiring during the pandemic. Microsoft laid off 10,000 workers in January and Alphabet cut 12,000 jobs. Salesforce, Meta, Amazon and PayPal have also reduced their workforce. This week, Dell said it would lay off more than 6,500 employees. In addition, media companies, including Vox Media and The Washington Post, have been cutting jobs.
Mr. Yuan said he would cut his salary by 98 percent for the next 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 company data. representation statement Since May. Mr. Yuan is worth approximately $3.9 billion based on his sizable stake in Zoom stock, Forbes reported.
Zoom’s executive leadership team will see their base salaries cut by 20 percent for fiscal 2023 and lose their corporate bonuses.
Employees affected by the layoffs will receive up to 16 weeks of pay and health care coverage, their bonuses for fiscal 2023 and help finding a new position, according to the blog post.
