Zoom said on Tuesday it would lay off about 1,300 employees, or about 15 percent of its staff, the latest to announce significant job cuts as the pandemic spurs demand for digital services. Will become a tech company.
In a memo to employees, Zoom CEO Eric Yuan said the layoffs will affect every part of the organization. Yuan also said he and other executives would take significant pay cuts, after admitting he made “mistakes” about how fast the company grew during the pandemic.
“As CEO and founder of Zoom, I am accountable for the mistakes and the actions we’re taking today—and I want to show accountability not just in words, but in actions,” he wrote. “To this end, I am cutting my salary by 98% for the coming financial year and carrying forward my FY23 corporate bonus.”
Members of the executive leadership team will take a 20 percent cut in their base salaries for the coming fiscal year and forfeit their fiscal 2023 bonuses, Yuan said.
Zoom shares rose nearly 9 percent in midday trading on Tuesday after the announcement.
Zoom, more than most companies, came to define the early days of the pandemic, as many turned to its platform to video chat with friends and colleagues during the lockdown. By mid-2020, Zoom reported skyrocketing revenue due to an increase in business users from many companies that are forced to turn to remote work.
Yuan said the company expanded staff “rapidly” during the early days of the pandemic to support a surge in demand as many people turned to its platform to video chat with friends and colleagues. “Within 24 months, Zoom tripled in size to manage this demand while enabling continuous innovation,” Yuan wrote.
Zoom stock fell significantly last year, however, as more workers returned to office life.
Zoom is far from the only pandemic to experience a sharp decline. Peloton, for example, has gone through several periods of vacation. Most big tech, which grew rapidly during the pandemic, have since announced layoffs as well.
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