Zoom announces layoffs of 1,300 employees and executive pay cuts

Zoom announced on Tuesday (7) that it will lay off about 1,300 employees, approximately 15% of its staff, becoming the latest technology company to carry out mass cuts as the increase in demand for digital services due to the recession slows. pandemic.

In a memo to employees, Zoom CEO Eric Yuan said the layoffs would affect all parts of the organization. Yuan also revealed that he and other executives would take a significant pay cut, after acknowledging that he had made “mistakes” in how quickly the company grew during the pandemic.

“As CEO and founder of Zoom, I am responsible for these mistakes and the actions we take today – and I want to show accountability not just in words, but in my own actions,” he wrote. “As a result, I am reducing my salary for the next fiscal year by 98% and waiving my FY23 corporate bonus.”

Yuan said members of the executive leadership team will reduce their base salaries by 20% in the next fiscal year and forfeit their fiscal 2023 bonuses.

Zoom shares were up nearly 9% in midday trade Tuesday after the announcement.

Zoom, more than most companies, defined the early days of the pandemic, as many turned to its platform to video chat with friends and colleagues during lockdowns. In mid-2020, Zoom reported skyrocketing revenue fueled by a rise in corporate customers from the many companies forced to resort to remote working.

Yuan said the company hired staff “quickly” during the early days of the pandemic to meet the “boom” in demand, as many turned to its platform to video chat with friends and colleagues. “In 24 months, Zoom has grown 3X to manage this demand while enabling continued innovation,” Yuan wrote.

Zoom’s shares have dropped significantly in the past year as more workers have returned to office life.

Zoom is far from the only pandemic darling to experience a sharp drop. Peloton, for example, has gone through several rounds of layoffs. Most of the Big Techs, which also grew rapidly during the pandemic, also announced layoffs.