Zoom has announced that it will lay off approximately 1,300 people, or about 15% of its workforce, in order to streamline operations and improve profitability.
Zoom CEO Eric Yuan announced in a blog post that the company will lay off approximately 500 employees, or roughly 10% of its workforce. Yuan stated in his announcement that the layoffs are part of a larger effort to “right-size the company” and streamline operations.
He acknowledged that laying off employees was a difficult decision but emphasized that it was necessary to ensure the company’s long-term success. Yuan also stated that the company will provide assistance and resources to those affected by the layoffs, such as severance packages and job placement assistance. He went on to say that the layoffs affect everyone in the company and that he plans to cut his own salary by 98% for the coming fiscal year and forego his corporate bonus for fiscal year 2023.
The layoffs come as Zoom’s growth slows after a surge in demand for its video conferencing services during the COVID-19 pandemic. Revenue growth at the company has slowed from 355% in the second quarter of 2020 to 67% in the third quarter of 2021. Zoom’s stock has closed up nearly 10% since the announcement.
Zoom has also faced increased competition in the video conferencing market, with tech behemoths like Google and Microsoft launching similar services. As a result, in order to compete in a crowded market, the company is likely to cut costs and streamline operations.
The sources for this piece include an article in Axios.