Conducting layoff for 5% of its team, Zoom‘s CEO will lessen his salary by 98% and forego his bonus for the 2023 fiscal year.
Heaptalk, Jakarta — Zoom Video Communications Inc, an online-based conferencing video company, revealed the company had joined the layoff wave around the technology companies on Tuesday (02/07). Zoom has slashed about 1,300 jobs, impacting 15% of its workforce globally.
Heightening the list of technology companies that carried out a layoff decision, Zoom also encountered a business slowdown in its conferencing video services along the waning of the Covid-19 pandemic, delivering a related charge of up to US$68 million. As an effect, this job-cutting move is Zoom’s strategy to suppress the expenses amidst the crisis for the last year.
Cited in Reuters, Zoom’s Chief Executive Officer, Eric Yuan, voiced, “We worked tirelessly, but we also made mistakes. We didn’t take as much time as we should have to analyze our team entirely and assess whether we had evolved sustainably toward the highest priority,”
Yuan recognized this complicated resolution would influence each division in Zoom. as a measure of accountability for this decision, Zoom’s CEO affirmed the company would grant about US$50 million to US$68 million devoted to the laid-off team, covering the salary for 16 weeks ahead and health care protection.
On the other hand, Yuan also claimed to lessen his salary by 98% and forego his bonus for the 2023 fiscal year. Meanwhile, other executive teams will unleash 20% of their basic salary.
“As the company’s leader, I am responsible for this blame and the actions we have determined. For this reason, I intend to show accountability in my measures, removing through words only,” added Yuan, cited in CNBC.
The business upturn of Zoom company
During the two years of the pandemic, Zoom company replenished its staff up to three times to contribute to the company with a high service demand. Before the covid-19 outbreak was declared a national emergency in the United States, the number of Zoom employees reached around 2,500 at the end of January 2020. Since then, the number of employees has increased by approximately 6,000 people.
Regarding the company’s income, this technology company based in the United States noted its revenue spike of up to 191% YoY in the early quarter of 2021. Nevertheless, the business growth of the company continues to slow down. In the quarterly report, Zoom explained its income in November 2022, enhancing only 5% on an annual basis attaining US$1.1 billion.
Although experiencing an online earning decline by 9%, the company revenue uplifted by 20%, becoming US$614.3 million. Zoom also divulged its free cash flow worth US$272.6 million.
Following this layoff annoucement, in the trading period on Tuesday (07/02), Zoom shares strengthened 9%, achieving US$84.66 on the United States Stock Exchange. Despite showing an improvement, Zoom shares still plummeted 85% from their all-time high in October 2020.
