Zoom CEO: 15 Percent Of Staff To Be Laid Off; ‘Each Organization’ Will Be Impacted
The videoconferencing giant announces that it will be reducing its global staff by about 15 percent. CEO Eric Yuan says he would reduce his salary for the coming fiscal year by 98 percent and foregoing his FY23 corporate bonus as a result.
Zoom Video Communications on Tuesday announced that it will be reducing its staff by 1,300 employees, or about 15 percent of its staff, CEO Eric Yuan revealed in an internal message to Zoom employees.
Yuan said that “each organization” across Zoom will be affected by the job cuts.
San Jose, Calif.-based Zoom has not returned CRN’s request for information on how the company’s channel team will be affected.
“We did not take a single departure lightly – our leadership carefully examined and made decisions based on critical priorities for long-term growth, and also looked for functions that have become overly complex or duplicative. Some teams will also be adjusting their structures to allow us to better invest in the opportunities ahead,” Yuan said in his message.
[Related: New Zoom Channel Chief On Hybrid Work, Profitability, And Building a ‘Partner-Centric Culture’ ]
Yuan’s message to employees, which is now posted on Zoom’s blog, said that impacted employees would find out if they had been impacted by the cuts via email on Tuesday.
Zoom at the start of the COVID-19 pandemic three years ago quickly emerged as a leader in the videoconferencing and collaboration market as businesses all over the globe transitioned to accommodate remote employees. Zoom quickly mobilized and staff up during the pandemic to build out its platform, up its security, and manage the influx in global demand. The company said that within 24 months, Zoom grew three times in size.
“We worked tirelessly and made Zoom better for our customers and users. 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,” Yuan said.
He added that as CEO and founder of Zoom, he is accountable for these mistakes and the actions the company is taking today.
Yuan said he is reducing his salary for the coming fiscal year by 98 percent and foregoing his FY23 corporate bonus. Members of Zoom’s executive leadership team will reduce their base salaries by 20 percent for the coming fiscal year while also forfeiting their FY23 corporate bonuses.
Zoom stock rose 6 percent to $81.92 after the news was disclosed. The stock benefited greatly at the start of the COVID-19 pandemic when more employees were working from home -- shares were as high as $559 a share in October 2020 -- but has been sinking since the pandemic IT boom has largely faded away.
For its most recent third quarter, Zoom reported revenue of $1.1 billion and net income of $48 million compared to $1 billion in sales and $340 million in net income during the same period the year before.
The company reports its fourth quarter and full fiscal year 2023 earnings Feb. 27.
Zoom is the latest Bay Area native that’s announced layoffs this year. Amazon in January announced plans to lay off 18,000 people and neighbor Salesforce also carried out a round of job cuts that impacted about 7,000 jobs or upwards of 10 percent of its workforce last month. Cisco Systems also eliminated 673 jobs in the San Francisco Bay Area in January.