Zoom Laying Off Over 1,300 Workers, CEO Taking Pay Cut
The job cuts in tech are coming fast and furious in 2023 amid growing fears of recession and economic uncertainty.
The latest company to announce it's laying off staff is Zoom, the video conferencing service that saw unprecedented growth during the COVID-19 pandemic, when the world was forced to shutter indoors. But now that the pandemic is close to over, the company is no longer doing as well as it did a couple of years ago, and has to commence job cuts.
Zoom announced on Tuesday, February 7 it's letting go of around 1,300 employees, equating to about 15% of its workforce.
CEO Eric Yuan explained in a message that during the pandemic the company had to rapidly staff up to support the rising number of users on the service, while continuing to innovate, growing three times in size in the span of two years. The company, however, grew so fast that it didn't take as much time it needed to assess if it was doing so sustainably, so it now has to reduce its headcount
"As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom," Mr Yuan said. "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."
Mr Yuan also said he's taking accountability for the job cuts, which is why he's reducing his salary by 98% and foregoing his corporate bonus for the coming fiscal year. Members of executive leadership, meanwhile, are cutting their base salaries by 20% and similarly forfeiting their corporate bonuses for the same period.
Zoom promises to share some support to the departing full-time workers, including those not based in the U.S. They'll be provided with up to 16 weeks’ salary and healthcare coverage, payment of their earned fiscal year 2023 annual bonus based on performance and outplacement services that include coaching, workshops and networking groups, among others. U.S. employees can also expect RSU and stock option vesting for six months and through 9 August, 2023 for those outside the country.
"While we have to take these steps today, we will continue to invest in key strategic areas to help us reach our vision," Mr Yuan added.
Other tech giants that have announced jobs cuts this year include Amazon, PayPal, Microsoft, Dell and Spotify.
Zoom has announced it's letting go of around 1,300 employees, equating to about 15% of its workforce.
CEO Eric Yuan explained that the company grew too fast to support the rising number of users on the platform during the COVID-19 pandemic – so much so it failed to consider if it was doing so sustainably.
He's taking accountability for the job cuts, which is why he swore to reduce his salary by 98% and forego his corporate bonus for the coming fiscal year.