Zoom Announces Layoffs and Executive Pay Cuts
Zoom Video Communications Inc., the San Jose-based video conferencing software company that became ubiquitous during the pandemic, has announced it will lay off 1,300 employees, or around 15% of its workforce.[0] This is the latest in a series of Big Tech layoffs, joining Microsoft, Amazon, Meta, and PayPal.[1]
In a memo to employees, Zoom’s CEO, Eric Yuan, said the layoffs would impact every part of the organization and that he and other executives would take a significant pay cut, after acknowledging he made “mistakes” in how quickly the company grew during the pandemic.[2] He said he is reducing his salary for the coming fiscal year by 98% and forego his FY23 corporate bonus.[3] Members of the executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting their FY23 corporate bonuses.[4]
In the US, employees who are laid off are entitled to up to 16 weeks of salary, healthcare coverage, accrued bonuses, 6 months of stock option vesting, and additional benefits.[5]
The layoffs come as Zoom stock declined significantly last year, as more workers returned to office life.[6] Zoom is not the only company that has seen a sudden decline in its popularity due to the pandemic.[6] Peloton, for example, has gone through several rounds of layoffs, and much of Big Tech, which also grew fast during the pandemic, has since announced layoffs, too.[6]
[7] The company estimated that its fourth-quarter revenue would be approximately 2.5% higher than the same quarter last year when it announced its third-quarter results.[7]
Mr Yuan wrote in a blog post that Zoom was built to reduce the difficulty businesses experienced when working together. When the pandemic hit, our direction shifted, and I am proud of the way our company was able to help people stay connected. To make this happen, we had to rapidly increase our staff to accommodate the rising number of users and their ever-evolving requirements. Within 2 years, Zoom had grown 3 times in size, allowing us to cope with the demand and continue innovating.[8]
0. “”Email In Next 30 Minutes…”: Zoom CEO Announces 1,300 Job Cuts” NDTV, 8 Feb. 2023, https://www.ndtv.com/world-news/email-in-next-30-minutes-in-your-inbox-zoom-ceo-eric-yuan-announces-1-300-job-cuts-3762554
1. “Zoom is laying off 1300 employees, CEO taking 98 percent pay cut” Mashable, 8 Feb. 2023, https://mashable.com/article/zoom-mass-layoff-ceo-pay-cut
2. “Zoom will lay off 1,300 employees and CEO is taking a massive pay cut” Boston News, Weather, Sports | WHDH 7News, 7 Feb. 2023, https://whdh.com/news/zoom-will-lay-off-1300-employees-and-ceo-is-taking-a-massive-pay-cut
3. “Bay Area tech layoffs: Zoom cuts 15% of workers, more than 1,000 jobs” San Francisco Chronicle, 7 Feb. 2023, https://www.sfchronicle.com/tech/article/zoom-layoffs-17769585.php
4. “Zoom CEO to take 98% pay cut amid layoffs. His new salary will be…” Moneycontrol, 8 Feb. 2023, https://www.moneycontrol.com/news/trends/zoom-ceo-eric-yuan-to-take-98-pay-cut-amid-layoffs-his-new-salary-will-be-10028291.html
5. “Zoom will lay off 15 percent of its workforce in the latest tech business cutback” Neowin, 7 Feb. 2023, https://www.neowin.net/news/zoom-will-lay-off-15-percent-of-its-workforce-in-the-latest-tech-business-cutback/
6. “2023 tech layoffs update: Zoom will lay off 1,300 employees as CEO Eric Yuan takes massive pay cut” WLS-TV, 7 Feb. 2023, https://abc7chicago.com/zoom-layoffs-2023-tech-companies-in/12782118/
7. “Here's Why Zoom Stock Suddenly Soared Today” The Motley Fool, 7 Feb. 2023, https://www.fool.com/investing/2023/02/07/heres-why-zoom-stock-suddenly-soared-today
8. “Zoom and gloom: Vid-chat biz sheds 15 percent of staff – by email” The Register, 8 Feb. 2023, https://www.theregister.com/2023/02/08/zoom_fires_15_percent_staff
