Video conferencing company, Zoom, has announced that it will be cutting 15% of its workforce, or 1,300 people, due to the uncertain global economy and its impact on the company’s customers.
“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 we can weather the economic environment,” wrote CEO Eric Yuan in a blog post to employees.
At the start of the pandemic, Zoom experienced an unprecedented boom, leading the company to grow its staff three-fold to meet the sudden increase in demand. Despite the growth slowing down, the company remained on a steady upward trajectory, reporting a 5% YoY increase in revenue to $1.1 billion in the last quarter of 2022.
“As the 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,” said Yuan, who will be cutting his salary by 98% and declining his bonus. The executive leadership will also reduce their pay by 20% and forego their bonuses.
From July 2019 to October 2022, Zoom’s workforce expanded by a staggering 275%, reaching a total of 8,422 employees, according to filings submitted to the SEC. During the Covid-19 pandemic, when people were forced to stay at home, businesses and schools relied heavily on Zoom to continue their operations.
However, like many other companies that saw success during the pandemic but faced challenges as lockdowns lifted, Zoom has had difficulty maintaining its growth. The company’s market value reached a high of $150 billion in late 2020, but with the gradual return of workers to physical offices and the phenomenon of “Zoom fatigue,” its value has diminished. Currently, Zoom is worth approximately $24 billion, not much more than it was before the pandemic.