Zoom To Lay Off 15% Of Its Workforce, Says CEO Eric Yuan

California-based video conferencing platform Zoom has announced to lay off 15% of a significant portion of its workforce. Approximately 1,300 of its staff will be laid off.

The move means the video conferencing provider will become the latest tech giant to make layoffs this year, joining Google and Microsoft in significantly reducing the sizes of their respective workforces.

According to a Reuters report, the decision came at a time when the global video conference platform witnessed a downfall in demand for its video conferencing services since the decline of the global pandemic.

Statement from Eric Yuan

“Our trajectory was forever changed during the pandemic when the world faced one of its toughest challenges, and I am proud of the way we mobilized as a company to keep people connected. We worked tirelessly, but we also made mistakes.

We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities. But the uncertainty of the global economy, and its effect on our customers, means we need to take a hard look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision,” the CEO noted.

Yuan also stated that he and other executives will take a significant pay cut. In the message to employees, he admitted to making mistakes in how quickly the company grew during the pandemic.

“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today- and I want to show accountability not just in words but in my own actions. To that end, I am reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus. Members of my executive leadership team will reduce their base salaries by 20 per cent for the coming fiscal year while also forfeiting their FY23 corporate bonuses,” Eric Yuan wrote.

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A regulatory filing revealed that the company would go through $50 million to $60 million charges related to the layoffs.

The company has been going through a rough patch since 2022. It witnessed a 38 per cent decline in profit in the fiscal year 2022. The revenue only rose by 6.7 per cent in the same period.

A Mint report revealed that last year, nearly 1,50,000 lost their jobs in the global tech space. Big tech giants like Facebook’s parent Meta and Twitter were seen to cut down employee numbers, fearing a global recession. Twitter laid off 7,500 employees after the acrimonious takeover by the maverick billionaire Elon Musk. Meta also trimmed 13 per cent of its entire workforce.