Zoom said Tuesday it will lay off 1,300 employees, the latest in a slew of tech industry cuts.
The meetings platform company blamed the 15% reduction in staff on a decline in sales as the majority of people who worked remotely during the COVID pandemic’s height have returned to in-person workspaces and activities.
“We have made the tough but necessary decision to reduce our team by approximately 15% and say goodbye to around 1,300 hardworking, talented colleagues,” CEO Eric Yuan said in a letter addressed to all “Zoomies” on the site’s blog.
“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,” Yuan said. “To make this possible, we needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs. Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation.”
He said that during this period the company’s leadership made “mistakes” in failing to assess the sustainability of the growth process.
To this end, he said, he would also relinquish 98% of his base salary for the coming fiscal year, as well as his entire 2023 corporate bonus. Executive leadership team members will see a 20% base salary reduction and forego their bonuses as well, he said.
Yuan’s base salary at his 2018 hire date was $300,000, according to SEC filings. However, his salary makes up a very small portion of his reported net worth. He held nearly $4.4 million in stock options when the company filed for its initial public offering in 2019. The value of his holdings in the company has drastically grown in the years since Zoom went public.
In 2021, Yuan transferred $6 billion worth of shares into a trust fund under the rubric of estate planning, as Bloomberg reported at the time.
Zoom’s stock price rose 8% Tuesday afternoon, CNBC reported.
Laid-off staffers were to receive emailed notification and be given “up to” 16 weeks’ pay and health benefits. They will also reportedly receive their 2023 annual bonus “based on company performance,” stock options and vesting for six months, and outplacement services that include career coaching.
The news comes as the latest in a slew of layoffs in industries that saw drastic growth during the thick of the coronavirus pandemic. Package delivery firm FedEx last week announced it would lay off 10% of its directors and officers, and payment facilitator platform PayPal laid off 2,000 people, or 7% of its workforce. Other tech casualties include Alphabet, Google’s parent company, which is shedding 12,000 workers, or 6% of its employee count, and Microsoft, who will bid farewell to 10,000 people by March, 5% of its employees.
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