On Tuesday, Zoom announced it would reduce nearly 1,300 jobs, or 15% of its workforce, making it the newest tech company to do so as the pandemic-driven rise in demand for digital services starts to slow.
Zoom’s CEO Eric Yuan warned that the layoffs will affect every area of the company in a memo to staff members. Yuan acknowledged that he made “mistakes” in how swiftly the business expanded during the pandemic and added that he and other executives would take a large pay cut.
As the CEO and founder of Zoom, he added, “I am accountable for these errors and the decisions we make today. I want to demonstrate accountability not only through words but also through my own behavior.
“As a result, I am eliminating my FY23 company bonus and cutting my compensation for the upcoming fiscal year by 98%.”
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Yuan said that the executive leadership team members’ base wages would be reduced by 20% for the upcoming fiscal year and that they would forgo their incentives for the fiscal year 2023. Following the news, Zoom’s shares increased by over 9% in lunchtime trade on Tuesday.
The early stages of the pandemic were more closely associated with Zoom than with most other businesses since so many people used its platform to video chat with friends and coworkers while under lockdowns.
By the middle of 2020, Zoom claimed soaring income driven by a surge in commercial clients from the numerous organizations that were obliged to use remote workers.
In order to meet the surge in demand as more people started using its platform to video chat with friends and coworkers, Yuan said the firm “rapidly” staffed up during the early stages of the pandemic.
#Zoom announces layoffs that will affect nearly 1300 'hard-working and talented,' employees https://t.co/PWBiQlrtea
— Republic (@republic) February 8, 2023
To meet this demand and support ongoing innovation, Zoom tripled in size in just 24 months, according to Yuan’s writing. However, as more employees returned to the workplace last year, Zoom stock experienced a huge fall.
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Zoom is not the first epidemic favorite to suffer a rapid decline. For instance, Peloton has seen numerous rounds of layoffs. A significant portion of Big Tech, which expanded quickly during the pandemic, has since announced layoffs as well.
Additionally, late on Tuesday, eBay (EBAY) announced in a regulatory filing that it would eliminate 500 jobs worldwide over the next 24 hours or about 4% of its workforce