After an unfathomable boom at the start of the pandemic, Zoom has made the decision to cut 15% of its workforce or 1,300 people.
“The uncertainty of the global economy, and its effect on our customers, means we need to take a hard – but important – look inwards to reset ourselves so we can weather the economic climate,” CEO Eric Yuan wrote in a blog post. addressed to “Zoomies.”
In the first 24 months of the pandemic, Zoom tripled its headcount to meet a sudden surge in demand as the company posted triple-digit year-over-year growth for five consecutive quarters. That growth slowed, of course, but Zoom remained on a steady upward trajectory. When the 12-year-old company last reported quarterly results in November, revenue was up 5% year over year to $1.1 billion; while online sales fell 9%, corporate revenue increased 20% to $614.3 million. Zoom also reported $272.6 million in free cash flow.
“As CEO and founder of Zoom, I am responsible for these mistakes and the actions we take today — and I want to show responsibility, not just in words, but in my own actions,” Yuan wrote. He cuts his salary by 98% and refuses his bonus; he said executive leadership will cut their salary by 20% and also forfeit their bonuses.
According to Forbes, Yuan’s net worth is $3.9 billion.
Affected employees will receive up to 16 weeks of salary and health insurance, plus their last year’s bonus. They will also have access to vesting of stock options and services to help them find a new job.
Update, 2:27 PM ET, 7/2/23: An earlier version of the article stated that the company spent $14.7 billion to acquire cloud call center Five9. The deal fell through.