Zoom Video Communications Inc. is the latest tech company to join the slew of Big Tech layoffs, announcing on Tuesday that it will cut approximately 1,300 employees, or 15 percent of its workforce. The decision comes as the pandemic-induced surge in demand for digital services is waning.
In an internal email to staff, Zoom CEO Eric Yuan said he is taking accountability for the layoffs, reducing his salary for the coming fiscal year by 98 percent and foregoing his FY23 corporate bonus. He added that members of his executive leadership team will reduce their base salaries by 20 percent for the coming fiscal year while also forfeiting their FY23 corporate bonuses.
“We didn’t take a single departure lightly – our leadership carefully examined and made decisions based on critical priorities for long-term growth, and also looked for functions that have become overly complex or duplicative,” Yuan wrote in his message.
Zoom experienced a massive surge in popularity at the start of the COVID-19 pandemic, tripling in size within 24 months as businesses and countries went into lockdown. But the company did not take enough time to assess if that growth was sustainable or “toward the highest priorities,” explained Yuan.
The layoffs are expected to cost Zoom between $50 million and $68 million, largely due to employee severance, with most reported in the current period ending in April. Affected staff will receive 16 weeks of salary and health care coverage, as well as other support.
Zoom is expected to announce its fiscal 2023 fourth quarter financial results on Feb. 27. The company is currently predicting modest growth and profitability. However, the layoffs are necessary to reset the company and “weather the economic environment, deliver for our customers and achieve Zoom's long-term vision,” said Yuan.
0. “Here's Why Zoom Stock Suddenly Soared Today” The Motley Fool, 7 Feb. 2023, https://www.fool.com/investing/2023/02/07/heres-why-zoom-stock-suddenly-soared-today
1. “Zoom CEO Takes A Pay Cut After Laying Off 1,300 Employees And Sends Stock Price Soaring—Earning Him More Money” Forbes, 8 Feb. 2023, https://www.forbes.com/sites/jackkelly/2023/02/08/zoom-ceo-takes-a-pay-cut-after-laying-off-1300-employees-and-sends-stock-price-soaring-earning-him-more-money/
2. “Zoom jumps as CEO says company will lay off 1300 workers (ZM)” Seeking Alpha, 7 Feb. 2023, https://seekingalpha.com/news/3933020-zoom-will-lay-off-1300-workers
3. “Zoom is laying off 1300 employees, CEO taking 98 percent pay cut” Mashable, 8 Feb. 2023, https://mashable.com/article/zoom-mass-layoff-ceo-pay-cut
4. “Zoom is the latest tech firm to announce layoffs, and its CEO will take a 98% pay cut” WBUR News, 8 Feb. 2023, https://www.wbur.org/npr/1155392099/zoom-layoffs-tech-jobs
5. “Zoom Video to Cut 1,300 Jobs, or 15% of Global Workforce” Yahoo News, 7 Feb. 2023, https://news.yahoo.com/zoom-video-cut-1-300-175517225.html
6. “Zoom cuts 15% of staff in post-pandemic ‘reset'” BBC, 7 Feb. 2023, https://www.bbc.com/news/technology-64562673
7. “Zoom laying off 15% of workforce” Axios, 8 Feb. 2023, https://www.axios.com/2023/02/07/zoom-laying-off-15-of-workforce