Zoom will lay off 15% of workers, the CEO apologizes and takes 98% pay cuts.
Zoom’s CEO has taken responsibility for the company’s recently announced layoffs. The salary will be cut by 98% until at least 2024.
Zoom has announced it will lay off 15% of its staff. The redundancies are expected to affect around 1,300 jobs at the company.
The company, which offers one of the most used video conferencing platforms in the world, started its operations in 2011 but saw a huge increase in its activities in 2020 when the pandemic caused an increase in working from home.
In a blog post announcing the layoffs, Zoom CEO Eric Yuan stressed that the company “had to hire quickly” during the early days of COVID-19: employee numbers tripled in record time to make in the face of increasing demand.
Ma Yuan added that the choice to grow so strongly and in such a short time was probably a mistake. “We didn’t take the time to dig deep into our teams or assess whether we were growing sustainably toward higher priorities,” she commented.
He added that even as people and businesses continue to rely on Zoom, “the uncertainty of the global economy and its effect on our customers is compelling immediate change.” It is a situation common to many other tech companies: Microsoft, Amazon and Google have also justified the dismissal of thousands of employees using very similar arguments.
Zoom employees who are laid off will receive up to 16 weeks of salary, an extension of health coverage and some bonuses based on the company’s performance. Those outside the United States will receive similar support, depending on what local laws prescribe.
Yuan said that as the CEO and founder of Zoom, he feels responsible for the company’s recent mistakes and has therefore made the decision to take a 98% pay cut, while also forgoing his annual bonus.