Zoom Lays Off 1,300 Employees Amid Pandemic Economic Turmoil
By The tech industry has seen a slew of layoffs in recent months, with Zoom the latest company to join the list. On Tuesday, the San Jose-based video conferencing software company announced it would lay off 1,300 employees, or 15 percent of its staff, due to a pandemic-induced decrease in demand for digital services.
CEO Eric Yuan said he is taking accountability for the move by reducing his salary for the coming year by 98 percent and foregoing his corporate bonus for fiscal year 2023.[0] Additionally, members of his executive leadership team will reduce their base salaries by 20 percent while also forfeiting their bonuses.[1]
“As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom,” Yuan said.[2] “But the uncertainty of the global economy, and its effect on our customers, means we need to take a hard — yet important — look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision.”[3]
Yuan pointed to the company’s rapid growth during the pandemic, noting that Zoom “needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs. Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation.”[4]
However, Zoom’s growth is now slowing, with its latest financial report showing growth of around 5 percent year over year, a sharp decrease from its 2021 revenue growth of 55 percent year over year.[5] Competitors such as Google Meet, Microsoft Teams, and Slack have also been gaining ground, with Microsoft Teams passing 270 million monthly users by early 2022.[5]
Zoom said in its filing that the layoffs and resultant restructuring would cost it between $50 million and $68 million, and affected staff will receive 16 weeks of salary and health care coverage, as well as other support.[6] The tech industry in general has seen numerous layoff announcements this year, with layoffs.fyi tracking more than 300 tech companies that have laid off 97,520 employees since the beginning of the year.
It remains to be seen if Zoom will survive the economic downturn, but for now the company is still pushing forward. “We worked tirelessly and made Zoom better for our customers and users,” Yuan said.[7] “But we also made mistakes.
0. “Zoom Stock Is Getting Hit With a Double Whammy” The Motley Fool, 8 Feb. 2023, https://www.fool.com/investing/2023/02/08/zoom-stock-is-getting-hit-with-a-double-whammy/
1. “Zoom will lay off 1,300 employees and CEO is taking a massive pay cut” 4029tv, 8 Feb. 2023, https://www.4029tv.com/article/zoom-will-lay-off-1-300-employees/42790905
2. “Zoom reducing headcount by 1,300” Fox Business, 7 Feb. 2023, https://www.foxbusiness.com/markets/zoom-reducing-headcount-by-1300
3. “Here's Why Zoom Shares Are Falling – Zoom Video Comms (NASDAQ:ZM)” Benzinga, 8 Feb. 2023, https://www.benzinga.com/news/23/02/30820886/heres-why-zoom-shares-are-falling
4. “Zoom will lay off 1,300 employees and CEO is taking a massive pay cut” CNN, 7 Feb. 2023, https://www.cnn.com/2023/02/07/tech/zoom-layoffs
5. “The End of the Zoom Boom” WIRED, 8 Feb. 2023, https://www.wired.com/story/zoom-layoffs-future/
6. “Zoom cuts 15% of staff in post-pandemic ‘reset'” BBC, 7 Feb. 2023, https://www.bbc.com/news/technology-64562673
7. “Zoom Lays Off Over 1,000 With Up to $68M in Charges” UC Today, 8 Feb. 2023, https://www.uctoday.com/unified-communications/zoom-lays-off-over-1000-with-up-to-68m-in-charges
