Zoom, the videoconferencing giant that grew rapidly during the pandemic, said on Tuesday that it was laying off 15 percent of its work force, or about 1,300 employees, becoming the latest tech company to cut back amid looming concerns about the economy.
Eric Yuan, Zoom’s chief executive, cited the company’s rapid hiring during the pandemic as well as “the uncertainty of the global economy” as factors in the company’s decision to cut labor costs.
“We worked tirelessly and made Zoom better for our customers and users,” he wrote in a blog post on the company’s website. “But we also made mistakes.”
From July 2019 through October 2022, Zoom’s work force grew by more than 275 percent, to 8,422 employees, according to filings to the Securities and Exchange Commission. When people were isolating at home at the height of Covid shutdowns, many businesses and schools became reliant on Zoom to maintain their operations.
But like other companies that flourished during the pandemic only to stumble as lockdowns eased, Zoom has struggled to maintain its growth. Its market value soared in late 2020, topping $150 billion, but with workers gradually returning to offices and “Zoom fatigue” entering the lexicon, the company’s value shrank. It is now worth about $24 billion, not much more than in the months leading up to the pandemic.
“We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities,” Mr. Yuan wrote in the note to staff on Tuesday.
Shares of Zoom jumped after the announcement of layoffs and were up nearly 8 percent in afternoon trading.
A number of major technology companies, worried about a slowdown in the broader economy, have also recently announced staff cuts after overhiring during the pandemic. Microsoft laid off 10,000 workers in January and Alphabet cut 12,000 jobs. Salesforce, Meta, Amazon and PayPal have also reduced their work forces. This week, Dell said it would lay off more than 6,500 employees. In addition, media companies, including Vox Media and The Washington Post, have been cutting jobs.
Mr. Yuan said he would reduce his salary by 98 percent for the coming fiscal year and would forgo his bonus. In Zoom’s last fiscal year, his salary was just over $300,000 and he did not receive a bonus, according to the company’s proxy statement from May 2022. Mr. Yuan is worth about $3.9 billion based on his sizable holding of Zoom stock, Forbes reported.
Zoom’s executive leadership team will see their base salaries reduced 20 percent for the 2023 fiscal year and will forfeit their corporate bonuses.
Employees affected by the layoffs will receive as much as 16 weeks of pay and health care coverage, their bonuses for the 2023 fiscal year and help finding a new position, according to the blog post.