Zoom Video Communications, Inc., a widely used communication technology platform, has announced they will fire 1,300 employees. Roughly 15% of the company’s workforce, as the COVID-19 pandemic continues to decimate the world economy. Employees and industry observers have reacted to the news with sadness as tech companies continue to lay off employees.
The CEO has given Zoom’s departing full-time staff, dubbed “Zoomies,” up to 16 weeks of pay and healthcare benefits in the US. Stock options, and the fiscal 2023 annual bonus, all based on company performance, will also vest for six months for US employees and through August 9, 2023 for non-US workers.
Eric Yuan, CEO of Zoom, wrote on his blog: “We must take a hard but crucial look within to reset ourselves. In order to weather the economic climate, serve our customers, and realise Zoom’s long-term vision. The global economy is uncertain, and its impact on our customers is felt by us. We do not take this difficult decision lightly. “We appreciate all of our employees’ sacrificial effort and commitment.”
Yuan has also disclosed that he will receive a pay cut of 98% and no bonus. Additionally, he has stated that the other members of the executive leadership team will not receive a corporate bonus. Their base salaries will be decreased by up to 20%.
In 2020, Zoom’s annual revenue increased dramatically as it quickly became the standard for communication in offices, classrooms, and homes. In response to the rise in demand, the company increased its workforce, bringing the overall number of workers to about 6,800. However, as the pandemic ends. As the demand for Zoom’s services declines, they made the decision to cut back citing the need to “reduce costs.”
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The recent layoffs at Zoom join an increasing number of tech companies that have reduced their workforces. As a result of a drop in business after the COVID-19 pandemic’s surge. In just 24 months, Zoom tripled in size to meet this demand and support ongoing innovation. The 2011-founded Zoom Video Communications, Inc., is based in San Jose, California. This pandemic has had an effect on more than one tech company. Many companies, including Amazon, Google, Microsoft, and others, have cut back on staff recently.
