Zoom to lay off 15% of staff, CEO takes 98% pay cut
Pandemic darling to cut 1,300 jobs
'We didn't take as much time as we should have to thoroughly analyse our teams or assess if we were growing sustainably,' says CEO Yuan, who is forgoing most of his salary this year.
Zoom Video Communications will cut about 1,300 roles, or about 15% of its total workforce, CEO Eric Yuan revealed in an internal message to Zoom employees.
Yuan said "each organisation" across Zoom will be affected by the job cuts.
"We did not take a single departure lightly - our leadership carefully examined and made decisions based on critical priorities for long-term growth, and also looked for functions that have become overly complex or duplicative. Some teams will also be adjusting their structures to allow us to better invest in the opportunities ahead," Yuan said in his message.
Yuan's message to employees, which was later posted on Zoom's blog, said employees would find out if they had been affected by the cuts via email on Tuesday.
Zoom quickly emerged as a leader in the videoconferencing and collaboration market at the start of the Covid-19 pandemic three years ago, as businesses all over the globe transitioned to accommodate remote employees. Zoom quickly mobilised and staffed up to build out its platform, up its security, and manage the influx in global demand, claiming it tripled in size in 24 months.
"We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes. We didn't take as much time as we should have to thoroughly analyse our teams or assess if we were growing sustainably, toward the highest priorities," Yuan said.
He added that as CEO and founder of Zoom, he is accountable for these mistakes and the actions the company is taking today.
Yuan has committed to reducing his salary for the coming fiscal year by 98% and forgoing his FY23 corporate bonus. Members of Zoom's executive leadership team will reduce their base salaries by 20% for the coming fiscal year, while also forfeiting their FY23 corporate bonuses.
According to Bloomberg, Yuan's base salary last year was just over $300,00, but his total compensation was $1.1 million. With the 98% pay cut, his new salary for 2023 would be about $6,000.
Zoom stock rose 6% to $81.92 after the news was disclosed. The stock benefited greatly at the start of the pandemic when more employees were working from home -- shares were as high as $559 a share in October 2020 -- but has been sinking since the IT boom has faded.
For its most recent third quarter, Zoom reported revenue of $1.1 billion and net income of $48 million, compared to $1 billion in sales and $340 million in net income during the same period the year before.
The company reports its fourth quarter and full fiscal year 2023 earnings on 27th February.
Zoom is the latest Bay Area native that's announced layoffs this year. Amazon announced plans to lay off 18,000 people in January, and neighbour Salesforce also carried out a round of job cuts that impacted about 7,000 jobs, or upwards of 10% of its workforce, last month.
In other job cuts news, cybersecurity company Secureworks, which is majority-owned by Dell, said it would be laying off 9% of its staff.
This article first appeared on Computing's sister site CRN.