Zoom, a well-known provider of video conferencing services that saw a surge in remote work during the Covid epidemic, is laying off 1,300 employees.
About 15% of its personnel would be impacted by the change, which comes as user growth and earnings have recently slowed.
As the business focuses on making sure it can withstand the recession, Eric Yuan announced that he and other leaders would also face significant compensation cuts.
It is joining a big group of other IT companies that are undertaking similar changes.
Zoom boss, Mr Yuan wrote in a message to employees shared by the company; “As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom.
“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.”
Other industry titans like Salesforce and Amazon also made significant job cutbacks announcements, claiming the pandemic-era business boom was coming to an end.
According to Layoffs.fyi, a website that tracks such announcements, approximately 100,000 people have been laid off by more than 300 tech companies globally since the year’s beginning.
Particularly when competing IT companies improve their video offerings, Zoom has encountered difficulties.
In 2020, the company’s sales more than tripled, and in 2021, it increased by roughly 55%. But in the previous year, the growth slowed to single digits, and its profits fell precipitously.
Since its peak in 2020, the company’s shares have fallen more than 80%.
In order to eliminate redundant roles and emphasize on the company’s core priorities, Mr. Yuan said the cuts will have an impact on every area of the organization.
The cost of the restructure, according to Zoom, is likely to range between $50 million and $68 million. Affected employees will receive 16 weeks of pay, health insurance, and other support.
Mr. Yuan declared that he would likewise eliminate his bonus and lower his pay in the upcoming fiscal year by 98%.
He stated that other executives on the senior leadership team will have a 20% reduction in basic pay and no longer get bonuses.
Mr Yuan said, “We worked tirelessly.. but we also made mistakes. We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities.
“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today – and I want to show accountability not just in words but in my own actions.”
Following the news, company stock increased by more than 8%.