On Tuesday, Zoom announced it will be laying off 1,300 people, or around 15% of its workers, making it the latest tech business to announce big job layoffs as demand for digital services declines after an uptick caused by a pandemic.
CEO Eric Yuan informed staff via a memo that the layoffs will affect all departments. After admitting he made “mistakes” in the company’s rapid expansion during the pandemic, Yuan also announced that he and other executives would receive a large compensation cut.
I want to show accountability not just in words but in my own actions as CEO and founder of Zoom,” he stated. For this reason, I have decided to forego my FY23 company bonus and reduce my compensation by 98% for the upcoming fiscal year.
Yuan said that the executive leadership team will take a 20% pay cut and forego bonuses for FY2023 in order to balance the budget.
Following the news, Zoom’s stock price increased by roughly 9 percent by lunchtime Tuesday.
More more than any other company, Zoom became a symbol of the early days of the epidemic as people resorted to its platform to keep in touch with loved ones and coworkers amid lockdowns. Zoom’s revenue exploded by the middle of the year 2020, thanks to an increase in corporate clients from the many organisations that were obliged to adopt remote work.
During the early stages of the pandemic, Yuan said, many people went to the company’s platform in order to video chat with friends and coworkers who were also affected by the outbreak. Zoom “became 3x larger within 24 months to manage this demand while enabling further innovation,” Yuan said.
However, as more people went back to the office in 2018, Zoom stock dropped considerably.
When it comes to pandemic fads, Zoom is hardly alone in its sudden decline. The cycling apparel company Peloton, for instance, has had to lay off a number of employees. The rapid expansion of Big Tech during the pandemic has been followed by widespread layoff announcements.
At the same time, eBay (EBAY) announced late Tuesday in a regulatory filing that it will be eliminating 500 jobs worldwide, or approximately 4% of its workforce, within the next 24 hours.