The well-known video conferencing platform Zoom revealed on Tuesday that it will be cutting off about 1,300 workers, or about 15% of its workforce. This announcement is made as the corporation, like many others in the tech sector, sees a drop in demand for its services as a result of the relaxation of lockdowns brought on by the epidemic.
Zoom’s CEO Eric Yuan stated in a memo to staff that the layoffs will have an effect on every aspect of the company and that he and other executives will be taking a big pay cut. He expressed concern for the business’s explosive growth during the pandemic and admitted that errors had been made. Yuan announced that he would be cutting his pay for the upcoming fiscal year by 98% and that the other members of the executive leadership team would be cutting their base pay by 20% and giving up their incentives for the fiscal year 2023 as a sign of accountability.
During the early stages of the epidemic, Zoom saw an increase in demand as more people used its platform for video conferencing with friends and coworkers. To handle the rising demand, the business quickly added workers, tripling in size in just 24 months. However, as more people settled back into the workplace, Zoom’s services became less in demand, which prompted the decision to make employment layoffs.
Zoom is hardly the only epidemic to suffer a rapid fall. A significant chunk of Big Tech has also experienced many rounds of layoffs, and other other companies, like Peloton, have also disclosed job losses. However, Zoom shares rose by roughly 9% during Tuesday’s lunchtime trading after the CEO remuneration cut and job reductions were announced.
As the initial rise in demand for digital services following the epidemic starts to taper down, Zoom is not the only internet company to have announced layoffs. Many other businesses have also gone through rounds of layoffs, like Peloton, which saw considerable growth during the pandemic. Due to the pandemic, more people are using video conferencing and other digital platforms, which has helped many businesses to keep operating even when staff worked from home. Due to the fact that millions of people used its platform to keep in touch with friends and coworkers, Zoom was at the forefront of this trend and soon gained notoriety.
The demand for video conferencing and other digital platforms started to fall as the epidemic started to abate and more workers returned to in-person employment, which caused a setback for many IT companies. The recent round of layoffs announced by Zoom as a result of this have an effect on every aspect of the company, including the executive leadership team. Eric Yuan, the CEO and creator of Zoom, has taken action to demonstrate responsibility for the layoffs, including significantly cutting his own compensation and the compensation of the top leadership team by 20%.
Despite the layoffs, Zoom shares increased by about 9% in lunchtime trade on Tuesday, highlighting the business’s ongoing success and development. Even as the pandemic continues to subside and the demand for its services starts to diminish, Zoom is still a significant player in the digital sector and is well-positioned for future growth and success.