15% Reduction in Zoom's Workforce will Result in the Layoff of 1,300 Employees

A blog post on Zoom's website reported that the company plans to cut about 1,300 employees, or 15% of its workforce, in the coming months.

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Afternoon trading for Zoom shares saw the stock rise 7%.

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In his blog post, CEO Eric Yuan stressed the company's need to adapt to "uncertainty in the global economy" and "its effect on customers" as the world adjusts to life after the Covid pandemic.

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In the midst of the pandemic, Zoom saw a boom in growth, as people remained in contact with family, friends, and colleagues through video chat software.

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Zoom was improved for our customers and users through our tireless efforts. Yuan admitted that they had made mistakes too. Our teams weren't thoroughly analyzed or assessed if we were growing sustainably, toward our highest priorities, as we should." 

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In her statement, Yuan said the cut would affect every organization within Zoom, and that employees who are laid off would be able to receive up to 16 weeks of salary and health care as compensation for their loss of employment. He also announced that he will be reducing his own salary by 98% in the upcoming fiscal year and that he will be shirking his corporate bonus for 2023 as well.

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The post states that Yuan, as Zoom's CEO and founder, is accountable for these mistakes and the actions we take today - and that she wants to show her accountability by not only verbally expressing it but also by her actions as well.

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Despite the recent layoff announcement from the company, it appears that job cuts are becoming a trend to be expected in the tech industry, as Dell announced plans on Monday to cut 6,650 jobs in the industry. In January, Google announced that it would be laying off more than 12,000 employees, Microsoft announced that it would be laying off 10,000 employees, and Salesforce announced that it would be laying off 7,000 employees.