American communications technology company headquartered in San Jose California, Zoom, has revealed plans to trim 15% of its workforce which is about 1,300 workers as it plans to navigate the current economic downturn.
The company’s CEO Eric Yuan via a blog post disclosed that the business during the peak of the pandemic hired too many staff to support the quick rise of users on the platform and their evolving needs.
He noted that the firm made a mistake by failing to thoroughly analyze team members or assess if it was growing sustainably towards the highest priorities. With the current uncertain global economy, the company was left with no option but to trim its workforce.
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Commenting on Zoom’s decision to layoff some members of its workforce, he wrote;
“Over the past few years, Zoom has become an indispensable source of connection for businesses and individuals as well as a globally recognized brand. Whether you have been at Zoom since the beginning or joined us more recently, you’ve played an important role in our evolution, and that makes today’s announcement particularly difficult.
“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. I know this is a difficult message to hear, and certainly not one I ever wanted to deliver.”
Yuan, who took the blame for the company’s current unfriendly condition, disclosed that each organization across Zoom will be impacted by the layoffs, noting that a single departure was not taken lightly.
By showing accountability not just in words but actions, the CEO further revealed his decision to slash his salary for the coming fiscal year by 98% and forgo his FY23 corporate bonus.
Also, members of his executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting the FY23 corporate bonuses.
Meanwhile, laid-off full-time employees in the U.S. will be offered the following support;
- Up to 16 weeks’ salary and healthcare coverage
- Payment of your earned FY’23 annual bonus based on company performance
- RSU and stock option vesting for 6 months for US employees and through August 9, 2023, for non-US employees.
- Outplacement services that include 1:1 coaching, workshops, networking groups, and more
Also, support for Zoom employees outside the U.S. will be similar and will take into account local laws.
Zoom’s revenue surged 326% year-over-year, to $2.65 billion, in the 12 months through Jan. 31, 2021, due to strong demand from consumers and remote workers. The company’s net income increased by a factor of more than 50 in the same time frame. But as workers began returning to offices, the company revenue gradually began to decline.
In a bid to keep the company afloat and maintain revenue growth, last November, Zoom rolled out a new set of email and calendar features along with an artificial intelligence assistant called the Virtual Agent to its platform, to enhance users’ experience.