[Global] 15% of Zoom workforce laid off and executive salaries cut

On February 7, communications tech company Zoom laid off 1,300 workers - 15 per cent of its workforce - and cut the salary of CEO Eric Yuan by 98 per cent as part of moves to manage falling demand for its services, TechTarget reports.

These tech layoffs are only the latest in an economic downturn that has led to thousands of job losses across the industry.

Mr Yuan reportedly notified employees of the job cuts in a letter sent half an hour before affected US workers received an email outlining the procedure for leaving the company and their severance packages. 

Zoom said it will handle the layoffs of non-US employees according to local laws.

"I know this is a difficult message to hear, and certainly not one I ever wanted to deliver," Mr Yuan wrote. "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."

The cutbacks are a necessity that will bring Zoom's costs in line with a decline in demand for its video conferencing services, Mr Yuan said. In 2020 and 2021, during the pandemic, the company grew three times in size to keep up with the growing demand for its products as organisations held virtual meetings with workers and clients.

Economic uncertainty caused by high inflation, rising interest rates, a shrinking US economy and the war in Ukraine has reportedly led to companies reducing expenses.

"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," Mr Yuan said.

Zoom laid-off workers across the organisation based on "critical priorities for long-term growth," he added. The company also targeted areas that had become "overly complex or duplicative."

In addition to the layoffs, Zoom reduced Yuan's salary by 98 per cent in the coming fiscal year and the wages of the executive team by 20 per cent. Yuan and the executives also reportedly forfeited their corporate bonuses.

Laid-off workers will receive up to 16 weeks of salary and healthcare coverage. The company will pay workers' fiscal year 2023 annual bonuses and provide outplacement services.

Since January, some of the biggest names in the tech industry - including Amazon, Google parent Alphabet, Meta, Microsoft and Salesforce - have cut thousands of employees from their workforce. 

"They're all retrenching and laying off workers," Blair Pleasant - principal analyst at COMMfusion - told TechTarget. "It's also partly to improve profitability because that's what Wall Street is looking for."

Zoom’s stock price was up more than 8 per cent on February 7.

Source: TechTarget

(Link and quotes via original reporting)

On February 7, communications tech company Zoom laid off 1,300 workers - 15 per cent of its workforce - and cut the salary of CEO Eric Yuan by 98 per cent as part of moves to manage falling demand for its services, TechTarget reports.

These tech layoffs are only the latest in an economic downturn that has led to thousands of job losses across the industry.

Mr Yuan reportedly notified employees of the job cuts in a letter sent half an hour before affected US workers received an email outlining the procedure for leaving the company and their severance packages. 

Zoom said it will handle the layoffs of non-US employees according to local laws.

"I know this is a difficult message to hear, and certainly not one I ever wanted to deliver," Mr Yuan wrote. "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."

The cutbacks are a necessity that will bring Zoom's costs in line with a decline in demand for its video conferencing services, Mr Yuan said. In 2020 and 2021, during the pandemic, the company grew three times in size to keep up with the growing demand for its products as organisations held virtual meetings with workers and clients.

Economic uncertainty caused by high inflation, rising interest rates, a shrinking US economy and the war in Ukraine has reportedly led to companies reducing expenses.

"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," Mr Yuan said.

Zoom laid-off workers across the organisation based on "critical priorities for long-term growth," he added. The company also targeted areas that had become "overly complex or duplicative."

In addition to the layoffs, Zoom reduced Yuan's salary by 98 per cent in the coming fiscal year and the wages of the executive team by 20 per cent. Yuan and the executives also reportedly forfeited their corporate bonuses.

Laid-off workers will receive up to 16 weeks of salary and healthcare coverage. The company will pay workers' fiscal year 2023 annual bonuses and provide outplacement services.

Since January, some of the biggest names in the tech industry - including Amazon, Google parent Alphabet, Meta, Microsoft and Salesforce - have cut thousands of employees from their workforce. 

"They're all retrenching and laying off workers," Blair Pleasant - principal analyst at COMMfusion - told TechTarget. "It's also partly to improve profitability because that's what Wall Street is looking for."

Zoom’s stock price was up more than 8 per cent on February 7.

Source: TechTarget

(Link and quotes via original reporting)