On Tuesday, Zoom Video Communications said it would cut 15 per cent of its workforce, or about 1,300 jobs, and trim base pay for its executive leadership as demand for the company's video conferencing services slows.
The company's shares fell by about 9 per cent after declining 63 per cent last year.
The new chief executive Eric Yuan said he will take a salary cut of 98 per cent for the coming fiscal year, leaving his corporate bonus for fiscal 2023 as a result of the layoffs.
We worked tirelessly but we also made mistakes. The top boss said that we didn't take as much time as we should have to analyze our teams and assess if we were growing sustainably, toward the highest priorities.
The company, which became a household name during lock downs due to the popularity of its video-conferencing tools, has seen its revenue growth slow.
After a four-fold jump in revenue and a nine-fold increase in profit in 2021, analysts believe that Zoom's revenue will have risen just 6.7 per cent in fiscal 2022, as well as a four-fold jump in revenue and a nine-fold increase in profit in 2021. The profit is estimated to have fallen 38 per cent in 2022.
Zoom had bumped up hiring to meet surging demand during the pandemic, but now joins US companies that are reining in costs to prepare for a possible recession.
A raft of US companies, including Goldman Sachs Group Inc., laid off thousands this year to ride out of a demand downturn wrought by high inflation and rising interest rates.
The video conferencing software maker also said that its executive leadership team will reduce their base salary by 20 per cent in the same period.
Yuan said that employees will receive 16 weeks of salary, healthcare coverage and annual bonus for the year.