A video conference company that made billions during the 2020 Pandemic announced Tuesday it plans to cut 1,300 employees or 15% of its workforce.
CEO Eric Yuan said in a blog post on the company's website: "We have made the hard but necessary decision to reduce our team by approximately 15% and say goodbye to around 1,300 hardworking, talented colleagues. Yuan said that the company needs to adapt to the uncertainty of the global economy as well as its effects on our customers as the world continues to adjust to life after the Covid epidemic.
The layoff announcement is the latest in a series of job cuts in the tech industry. Dell has laid off 6,650 workers. In January, Google also announced it plans to lay off more than 12,000 workers, while Microsoft announced it plans to cut 10,000 employees and Salesforce announced plans to lay off 7,000 workers.
When the stock was trading at its peak of $559, the darlings of investors traded below the price of Zoom stock, which is now trading below $85 at the time of writing. During the pandemic, governments around the world put millions of people on lockdown and forced them to stay in their homes. With nowhere else to go, millions turned to Zoom's conference technology in order to keep up with school, work or socializing.
The cuts will affect every organization on Zoom, and employees who are laid off will be offered up to 16 weeks of salary and healthcare coverage. He plans to reduce his own salary by 98% for the coming fiscal year and he will not be able to use his 2023 corporate bonus, according to the CEO.
I know this is a difficult message to hear, and certainly not one I wanted to deliver. If you are a US-based employee who is impacted, you will receive an email from your Zoom and personal inboxes in the next 30 minutes that reads IMPACTED Departing Zoom: What You Need to Know. Non-US employees will be notified of local requirements. For those who are waking up to this news or reading this after normal work hours, I am sorry that you are finding out this way, but we felt it was best to notify all impacted Zoomies as soon as possible. The company made some mistakes, according to Zoom. We worked hard to make Zoom better for our customers and users. We also made mistakes, adding that the company didn't take as much time as we should to analyze our teams and assess whether we were growing sustainably, toward the highest priorities. In April 2020, Zoom increased by over 50 percent in just 3 weeks, reaching 497,000 customers with more than 10 employees, up from 81,900 in January 2020. Eric Yuan founded Zoom in 2011. Like all immigrants who are looking for a better life, Yuan immigrated from China to the United States in the mid-90s because of the Internet. Yuan's visa application was denied 8 times before he came to the U.S. Today, Yuan is worth $12 billion.