Tech: Zoom lays off 15% of its staff

The group video conferencing company Zoom Video Communications, which became popular worldwide in the midst of a pandemic and “lockdown”, as it “penetrated” into everyone’s homes by allowing teleworking, telelearning and mass tele-collaboration in general, announced that dismisses 1,300 of its employees or about 15% of its staff.

It follows the lead of other tech companies that have also announced massive layoffs. More than 300 technology companies have since the beginning of 2023 announced total layoffs of nearly 100,000 workers worldwide.

The gradual end of the pandemic has led to slowing user growth and declining Zoom profits. The platform’s founder and chief executive Eric Yuan said he and other executives at the company would also take significant pay cuts, according to the BBC and Reuters.

“As the world transitions to post-pandemic life, we’re seeing people and businesses continue to rely on Zoom. But the uncertainty of the global economy and its impact on our customers means that we have to make a tough but necessary review so that we can address the economic environment, respond to our customers and realize Zoom’s long-term vision,” Yuan said. in his written message to staff.

Zoom’s revenue had tripled in 2020 and was up 55% in 2021, but in 2022 its growth was only around 7%, while there was a sharp decline in profitability of around 38%. The company’s shares have lost more than 80% of their value since their peak in 2020, and were down 63% last year, but are up nearly 10% after the layoffs were announced.

The dismisss will affect every part of the company and the cost of compensation is expected to reach $50 million to $68 million, as each person laid off will receive 16 salaries, health coverage and an annual bonus. Yuan’s salary will be reduced by 98% in 2023 (that is, almost zero), and he will not even get a bonus. The salaries of the other executives will be cut by 20%, and they too will not receive bonuses.

“We’ve worked tirelessly, but we’ve also made mistakes…As the CEO and founder of Zoom, I am responsible for those mistakes and the actions we take – and I want to take responsibility not only in words but also in my actions,” he said. Yuan, referring to his pay cut.

RES-EMP

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