Zoom CEO Eric Yuan sent out a message to employees letting them know about impending layoffs as the company joins a growing list of others in the tech sector that are doing the same. Mr. Yuan, who is also the founder of Zoom, took responsibility for the current state of the company and explained in a blog post that for the remainder of FY23 that he will take a 98% salary pay cut and also forgo his FY23 corporate bonus while reducing the Zoom workforce by around 15%, or 1,300 employees. Other Executive positions will see a 20% salary reduction and also forfeit their corporate bonuses for the year.
From Eric Yuan:
“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today– 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% and foregoing my FY23 corporate bonus. Members of my executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting their FY23 corporate bonuses.”
Zoom’s usage exploded across the globe during the early parts of the pandemic as workers from around the world tried to adapt to stay-at-home restrictions. As those restrictions were lifted many offices, if able, still retained a hybrid-type arrangement, but even then have been switching back to more traditional in-person attendance. The Zoom CEO also explained these dynamics.
“We built Zoom to remove the friction that businesses felt when collaborating. 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. To make this possible, we needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs. Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation.”
As such, the need for Zoom has declined greatly causing its revenue streams and stock prices to decline. Zoom is but just one of many other companies in the tech sector and according to Layoffs.fyi, there have been over 98,000 layoffs from 326 tech companies in 2023 already. From Amazon to Google, Microsoft to Meta, the announcements have begun pouring in since the end of 2022 and seem to be continuing.