Employees of Zoom who are affected will receive up to 16 weeks of pay, health insurance, their bonus for the 2023 fiscal year, stock vesting for six months, and other “outplacement services.”
Zoom, a well-known source of video conferencing services that made its reputation when the COVID epidemic caused a surge in remote work, is dismissing 1,300 employees.
About 15% of its personnel will be impacted by the change. Recently, user growth has slowed and profits have decreased. It is one of many tech companies that are making changes of this nature.
Highlights
Yuan’s Manoeuvre
The layoffs would affect every area of the company, according to a memo from Zoom’s CEO, Eric Yuan, to staff members. After admitting he made “mistakes” in how swiftly the company expanded during the pandemic, Yuan also announced that he and other executives would take a sizable compensation cut.
“We worked very hard. We weren’t ideal, though, we didn’t devote the necessary time to fully analyzing our teams or determining whether we were expanding sustainably towards the most important goals,” said, Mr. Yuan
“I am accountable for these mistakes and the measures we take today”, he stated in his statement as the CEO and creator of Zoom. “I want to show accountability not just in words but in my own actions.” to do this, I’m forfeiting my company’s FY23 bonus and slashing my income for the upcoming fiscal year by 98%.
Post-Pandemic Episodes
People and businesses continue to rely on Zoom, which is something Mr. Yuan observed as the world adjusted to life after the pandemic. But because of the volatility in the global economy and how it affects our consumers, to survive the current economic situation, serve our customers, and achieve Zoom’s long-term ambitions, we must take a challenging but important look inward and reset ourselves.
Yuan announced that the executive leadership team members’ base pay for the upcoming fiscal year will be reduced by 20%, and they will forgo their bonuses for the fiscal year 2023.
Following the news, Zoom’s shares increased by almost 9% during Tuesday’s noon trade.
Amazon and Salesforce are two more industry titans that have made significant job cuts, claiming that the commercial boom they experienced during the pandemic is coming to an end.
According to layoffs, approximately 100,000 people have been let go by more than 300 tech companies worldwide since the year’s beginning.
More than most businesses, Zoom came to represent the early stages of the epidemic as many people used its platform to video chat with friends and coworkers while in lockdowns. Zoom anticipated soaring income by the middle of 2020, driven by an increase in corporate clients from the numerous organizations that were obliged to use remote workers.
Yuan claimed that the business “rapidly” hired more employees in the early stages of the pandemic to handle the surge in demand as more people started using its platform for video chats with friends and coworkers. In order to handle this demand and support ongoing innovation, Zoom tripled in size within a 24-month period, according to Yuan.
However, as more individuals started working again last year, zoom stock fell precipitously.
The popularity of Zoom is by no means the only pandemic darling to suffer a rapid decline.
According to a regulatory filing made on Tuesday, Zoom will be charged between $50 million and $68 million in connection with the layoffs. The business stated that the majority of it will be used in the first quarter of fiscal 2024.
According to Mr. Yuan, the organization as a whole will be affected by the cuts, which aim to eliminate redundant functions and focus on the company’s core priorities.
Employees of Zoom who are affected will receive up to 16 weeks of pay, health insurance, their bonus for the 2023 fiscal year, stock vesting for six months, and other “outplacement services.”