Zoom to Lay Off 1300 Employees

Zoom announced that it will lay off 15 percent of its workforce, or about 1300 employees because of “the uncertainty of the global economy.”

“We have made the tough but necessary decision to reduce our team by approximately 15 percent and say goodbye to around 1,300 hardworking, talented colleagues,” Zoom CEO Eric Yuan writes. “Our trajectory was forever changed during the pandemic when the world faced one of its toughest challenges, and I am proud of the way we mobilized as a company to keep people connected. We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes.”

Among those mistakes, he said, was over-hiring and growing the Zoom workforce in an unsustainable way. That admission is notable and was largely missing from the similar missives we’ve seen recently from around Big Tech: how could these firms, so stocked with smart people, overreact in such a way to something that was so clearly a temporary boom time?

“As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom,” Yuan continues. “But 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, deliver for our customers and achieve Zoom’s long-term vision.”

And Yuan adds another bit that’s been in short supply among his Big Tech cohorts: he takes the blame.

“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today,” he continues. “And I want to show accountability not just in words but in my own actions. To that end, I am reducing my salary for the coming fiscal year by 98 percent and foregoing my FY23 corporate bonus. Members of my executive leadership team will reduce their base salaries by 20 percent for the coming fiscal year while also forfeiting their FY23 corporate bonuses.”

Every organization inside Zoom will be impacted by these cuts and the company’s leadership made their decisions based on its growth trajectory and functions that are overly complex or duplicative. Departing employees will receive up to 16 weeks’ pay and healthcare coverage, their earned FY23 bonuses, stock option vesting for 6 months, and outplacement services support.