Zoom, the video conferencing powerhouse that had explosive growth during the COVID-19 pandemic, has disclosed that 15% of its workforce, or around 1,300 workers, will be let go. The company’s CEO, Eric Yuan, attributed the need to reduce staff expenses to the company’s previously accelerated hiring during the pandemic and the unpredictability of the global economy.
The number of staff at Zoom increased by more than 275% between July 2019 and October 2022, reaching 8,422 employees. Many companies and schools depended on Zoom to keep their operations running at the peak of the pandemic; however, with lockdowns becoming rare events and the rise of “Zoom fatigue,” the corporation has struggled to continue its growth.
Zoom’s market cap peaked at $150 billion in late 2020, but has since dropped to roughly $24 billion. Yuan acknowledged not devoting enough effort to analyzing the company’s growth and determining if that expansion was sustainable in terms of the main company goals.
“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.
Zoom’s layoff news comes after a number of other technology businesses, concerned about a slowing economy, have recently announced workforce cuts. In January, Microsoft laid off 10,000 employees, Alphabet laid off 12,000, while Salesforce, Meta, Amazon, PayPal and Dell have also cut their workforces.
Yuan has announced that he will lower his pay by 98% and forego his bonus for the upcoming fiscal year. Yuan’s pay was little more than $300,000 in the previous fiscal year, and he did not earn a bonus. Yuan is worth around $3.9 billion, according to Forbes, due to his significant ownership of Zoom shares.