Zoom to cut 15% of its workforce; CEO Eric Yuan to take massive 98% pay cut
Zoom CEO and founder Eric Yuan said in a blog posted on Tuesday said that the company ramped up staffing during the COVID-19 pandemic, when businesses became increasingly reliant on its service as people worked from home.
PremiumIn a latest addition to tech layoffs, the video-conferencing service Zoom is cutting about 1,300 jobs, or approximately 15 percent of its workforce.
CEO Eric Yuan said in a blog posted on Tuesday said that the company ramped up staffing during the COVID-19 pandemic, when businesses became increasingly reliant on its service as people worked from home.
Yuan said Zoom grew three times in size within 24 months to manage demand.
Also Read: ChatGPT will lead to layoffs, but traders say they will be fine
He added that businesses continue to depend on its service post-pandemic but that adjustments are needed. “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," he wrote.
“We have made the tough but necessary decision to reduce our team by approximately 15 percent and say goodbye to around 1,300 hardworking, talented colleagues," he wrote.
Also Read: In times of layoffs PwC to hire 30,000 employees
Further adding, he wrote, “If you are a US-based employee who is impacted, you will receive an email to your Zoom and personal inboxes in the next 30 minutes that reads [IMPACTED] Departing Zoom: What You Need to Know. Non-US employees will be notified following local requirements. For those Zoomies waking up to this news or reading this after normal work hours, I am sorry you are finding out this way but we felt it was best to notify all impacted Zoomies as soon as possible."
Also Read: Amidst mass layoffs, scammers empty bank balances with a new plan: Here's how
Yuan also said he was also lowering his salary for the coming fiscal year by 98 percent and foregoing his 2023 corporate bonus, saying he was accountable for mistakes made at the San Jose.
He added the executive leadership team is also reducing their base salaries by 20 percent for the coming fiscal year and forfeiting their 2023 corporate bonuses.
In order to support the departing employees, he said, “Impacted employees will also receive outreach from a leader in your organization offering to have a 1:1 check-in should you want it; they are here to offer support during this transition."
The departing employees in the US will be offered up to 16 weeks’ salary and healthcare coverage, payment of the FY’23 annual bonus based on company performance, RSU and stock option vesting for 6 months for US employees and through August 9, 2023 for non-US employees, outplacement services that include 1:1 coaching, workshops, networking groups, and more.
Support for Zoomies outside the US will be similar and will take into account local laws. If you are departing, please know that you will always be part of the Zoom family, and we are here to support you as you navigate what’s next. Your dedication and talent will be amazing assets to any company, and I am deeply appreciative that you shared that talent with Zoom, he wrote.
Ending his post, he thanked the employees, “My commitment to you is that we will make sure the changes we are making to our team today are not made in vain. We will learn from the past to set ourselves up for future success, and redouble our efforts to help evolve Zoom to tomorrow. As always, thank you, Zoomies. I am grateful for your imprint on Zoom’s legacy."
Meanwhile, the tech industry started the year with a wave of job cuts, around 50,000 in January alone, and there doesn't appear to be any let up this month.
The computer maker Dell said Monday that it's cutting about 6,600 jobs. Large and small tech companies went on a hiring spree in over the past several years due to a demand for their products, software and services surged with millions of people working remotely.
However, even with all of the layoffs announced this year, most tech companies are still vastly larger than they were three years ago. In January, Amazon said it must cut about 18,000 positions. That's just a fraction of its 1.5 million-strong global workforce. Salesforce laid off 10% of its workforce, about 8,000 employees. Coinbase cut approximately 20 percent of its workforce, or about 950 jobs, in a second round of layoffs in less than a year. Microsoft cut about 10,000 jobs, almost 5 percent of its workforce. Google said 12,000 workers, or about 6 percent of its workforce, would be let go. Many other firms like Spotify, SAP, PayPal, IBM, Twitter, Lyft, Meta, HP laid off their employees.
(With inputs from AP)
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
