With revenue growth slowing and profits falling, Zoom says it is taking proactive measures to ensure the future viability of the business
This week, video conferencing company Zoom has become the latest in a string of major tech firms to announce major job cuts, citing the pressure of the global economy post-pandemic.
Zoom is laying off around 15% of its staff – roughly 1,300 people – as part of a wider restructure aimed designed at eliminating duplicative roles.
“As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom,” CEO Eric Yuan wrote in a message to staff. “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.”
Yuan said that the company has “worked tirelessly” but admits that it had made “mistakes”, particularly with regards to scaling up sustainably.
He announced he would take a pay cut of 98% for the next fiscal year and forgo his bonus.
Bloomberg suggests that Yuan’s base salary for the last financial year was $301,731, though his total compensation was reportedly closer to $1.1 million.
Other executive staff will also take a 20% pay cut and lose bonuses.
The covid pandemic jettisoned Zoom into the public zeitgeist back in 2020, with the rapid shift to home working quickly making the brand a household name. That year, the company saw its revenues triple, further increasing in 2021 by an additional 55%. Over this period, the company’s workforce also increased three-fold to meet the soaring demand.
By 2022, however, the pandemic was rapidly becoming a thing of the past for many markets around the world and work habits were reverting accordingly. Zoom saw its revenue growth slow to a single-digit crawl, with profits falling by 38%.
With share prices having similarly fallen around 80% from their mid-pandemic high, it should come as no surprise that the company is taking drastic measures to restructure.
It should be noted, however, that Zoom is not the only company looking to streamline its operations in recent months in the wake of the economic downturn. According to tracking data compiled by Layoffs.fyi, over 100,000 tech workers have been laid off this year, with Google, Meta, Microsoft, Amazon, and Salesforce
Indeed, earlier this week Dell announced that it was following suit, revealing plans to lay off around 5% of its global workforce, around 6,650 people.
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