Zoom to lay off 1,300 workers and join other tech giants

Zoom, the video conferencing giant that has grown rapidly during the pandemic, said on Tuesday it was laying off 15% of its workforce, or about 1,300 employees, becoming the latest tech company to cut its workforce amid concerns impending on the economy.

Eric Yuan, chief executive of Zoom, cited the company’s rapid hiring during the pandemic as well as “uncertainty in the global economy” as factors in the company’s decision to cut labor costs. ‘work.

“We have been working tirelessly and improving Zoom for our customers and users,” he 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 by more than 275%, 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 shutdowns, many businesses and schools became dependent on Zoom to maintain operations.

But like other companies that have thrived during the pandemic only to stumble as lockdowns eased, Zoom has struggled to sustain growth. Its market value soared at the end of 2020, surpassing $150 billion, but as workers gradually returned to offices and “Zoom fatigue” entered the lexicon, the company’s value declined. He is now worth around $24 billion, not much more than in the months leading up to the pandemic.

“We didn’t take as much time as we should have to thoroughly analyze our teams or assess whether we were growing sustainably, toward the highest priorities,” Yuan wrote in the memo to staff on Tuesday.

Zoom shares jumped after the layoffs were announced and were up nearly 10% by the end of Tuesday.

A number of big tech companies, worried about a slowdown in the broader economy, also recently announced workforce 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 also downsized. This week, Dell announced that it would lay off more than 6,500 employees. Additionally, media companies including Vox Media and The Washington Post have cut jobs.

Mr. Yuan said he would cut his salary by 98% for the coming fiscal year and forfeit his bonus. In Zoom’s last fiscal year, his salary was just over $300,000 and he did not receive a bonus, according to the company’s proxy statement from May. Mr. Yuan is worth around $3.9 billion based on his large Zoom stock portfolio, Forbes reported.

Zoom’s management team will see its base salary reduced by 20% for fiscal 2023 and lose its corporate bonuses.

Employees affected by the layoffs will receive up to 16 weeks of salary and health care coverage, their bonuses for fiscal year 2023 and help finding a new position, according to the blog.