In the last several months, Silicon Valley companies have announced they were laying off workers one after another, but this time Zoom employees will be among them as CEO Eric Yuan mentioned an uncertain economy and the possibility of a recession.
According to Reuters, the decision was taken after the company’s profits fell by 38% last year while new revenue only grew by 6.7%.
Zoom’s CEO sent a message to Zoom employees informing them of the layoffs, saying it was “particularly difficult” to say goodbye to “around 1,300 hardworking, talented colleagues.”
Zoom exploded to three times its size in 24 months to meet the booming market, but Yuan said the company made mistakes because it did not consider the long-term effects of the burgeoning market and did not prepare for a recession.
The CEO cited the uncertainty of the global economy and its effect on our customers as a reason we needed to take hard decisions. Now it is important, to look at ourselves in order to adapt to the changing economic environment, provide service to our customers, and fulfill the long-term vision of Zoom.
Yuan claimed in the message that he would take a 98% pay cut, other executives would also receive a 20% pay cut, and their FY23 corporate bonuses would be forfeited.
Laid-off Zoom workers will get a compensation package that includes up to 16 weeks of paid income and healthcare, their year-end bonuses, six months of RSU and stock option vesting, and services for one-on-one counseling, workshops, and networking groups.
The CEO clarifies to the Zoom employees that the changes we are making today will not go unnoticed. “We will learn from the past to prepare ourselves for future success, and redouble our efforts to help Zoom grow into the future.”
