Zoom has decided to lay off 15% of its workforce, or 1,300 people, after experiencing an unprecedented growth spurt just before the pandemic hit. CEO Eric Yuan wrote in a blog post to staff members (hereafter referred to as “Zoomies”), “The uncertainty of the global economy, and its effect on our customers, means we need to take a hard — yet important — look inward to reset ourselves so that we can weather the economic environment.”
Zoom tripled its workforce in the first two years of the pandemic in response to five consecutive quarters of year-over-year growth in the triple digits. This expansion slowed as expected, but Zoom continues to advance. The 12-year-old firm reported its most recent quarterly earnings in November, and while revenue was up 5% year-over-year to $1.1 billion, it was down 9% online and up 20% in the enterprise sector. Free cash flow for Zoom came in at $272.6 million.
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In his letter, Yuan said, “As CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today — and I want to show accountability not just in words but in my own actions.” He has decided to take a 98% pay cut and turn down his bonus, and he has also announced that the executive team will take a 20% pay cut and forego bonuses. The magazine Forbes estimates Yuan’s wealth at $3.9 billion.
Affected workers will receive up to 16 weeks of pay, health benefits, and their previous year’s bonus. Stock option vesting and career counselling will also be made available to them.
