Zoom to cut around 1,300 ‘zoomies’ as workers ditch wfh and head back to the office
Zoom is trimming its workforce by 15 per cent as demand for online working fades into the pandemic past.
Eric Yuan, chief executive of Zoom, said the company needed to “reset” and had made the “tough but necessary decision” to bid farewell to around 1,300 employees, in a memo shared with the public yesterday.
In the memo, addressed to his “Zoomies”, Yuan told staff the redundancies are a result of the global transition to a post-pandemic world and the “uncertainty of the global economy, and its effect on our customers”.
The video-calling platform is the latest tech firm to announce jobs cuts, already this year Amazon and Alphabet, have announced huge layoffs.
Susannah Streeter, analyst at Hargreaves Lansdown, told City PM: “Given that tech heavyweights like Microsoft, Meta and Alphabet have been engulfed in a wave of lay-offs, it’s little surprise that Zoom, which made its name during the pandemic, has been sideswiped by a loss of business.”
Zoom tripled in size within two years to manage the soaring demand of online working during the pandemic whilst also keeping up with innovation.
“We needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs”, said Yuan.
Despite the hard work, Yuan admits there were errors that led the company to rush important processes such as maintaining sustainable growth in the right direction.
The Zoom boss said he had reduced his own salary by 98 per cent this year and would not be collecting an end-of -year bonus. Executive team leaders would also be losing their bonuses in addition to 20 per cent base salary cut.
Zoom was always vulnerable to a return to pre-pandemic ways of working, said Streeter.
“Although video-conferencing is now part of everyday life for businesses large and small, the great strides the bigger competition like Microsoft have made with rival, more integrated services have clearly eaten into its prospects,” she added.
Zoom has also experimented with an advertising model but there are lingering concerns that the glum economic outlook is negatively impacting ad budgets.
Shares in Zoom were down in pre market trading.