Zoom will cut around 1,300 jobs in a restructuring plan that will deplete about 15% of its workforce.
The San Jose-based firm saw a boom in need for its video-conferencing services during the pandemic, but now demand has slowed.
The layoffs will cost the firm around $50-68 million in redundancy packages and charges.
In a Company News blog post to staff on Tuesday, Eric Yuan, CEO of Zoom, conceded the company made missteps and stated: “We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes.
“We didn’t take as much time as we should have to thoroughly analyse our teams or assess if we were growing sustainably toward the highest priorities.”
Yuan pointed to the current global downturn and added: “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.”
In a refreshingly honest statement, Yuan accepted he was accountable for ‘these mistakes’ and intended to show them in his actions. To that end, he announced:
“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.”
It is estimated that Zoom has more than 300 million users attending meetings every day. The service saw significant growth in 2020 amid the COVID-19 pandemic and remains a popular meeting facility.
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In other UC&C space redundancies, Avaya looked to save $250 million with job layoffs of around 2,500 after the firm had forewarned it would have to make these changes.
UCaaS firm RingCentral said it would lose around 10% of its employees by the end of 2023. Vlad Shmunis, CEO and Founder of RingCentral, announced the decision in an earnings call to investors despite the strong Q3 2022 results and stated: “Throughout the year, we have taken steps to expand our operating margins and drive efficiencies throughout our business.
Shmunis concluded: “While we recently made the tough decision to further rationalise our workforce, we believe this will allow us to be more agile and better align our course with our strategic priorities in the current macro environment.”
Salesforce also stated that it would have to remove just under 8,000 employees in a slowdown at the start of 2023.
Layoffs Across Tech Industry
The tech industry, in general, has seen numerous layoff announcements in the past month. According to the redundancy-tracking website, layoffs.fyi more than 300 tech companies have laid off 97,520 employees since the beginning of the year.
Google, Microsoft, IBM and Amazon have all announced job cuts. Google’s parent company shed 12,000 jobs after its third fiscal quarter was down by 27 per cent.
Microsoft will cut 10,000 through March 31 to counter slower revenue growth.
IBM cut 3,900 staff after failing to meet its annual cash target.
Amazon decided to let go of 6% of its 350,000 workers, as around 18,000 worldwide faced what it termed ‘eliminations’. At first, it seemed like only 10,000 would lose their jobs at the retail giant, but at the start of 2023, the redundancies of 8,000 more employees were announced.
