In an unfortunate tale of tech layoffs, Zoom said it should have spent more time assessing whether it’s sustainable. as growth exploded due to the pandemic when it announced plans to cut 1,300 jobs.
Zoom joins a list of US tech companies that have had to make significant cuts after rapidly hiring during the pandemic outbreak for the sector. Zoom said it would cut its global headcount by 15%, or 1,300 employees.
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Zoom and Microsoft Teams user numbers exploded during the first wave of the COVID-19 pandemic due to the shift to remote working. Zoom in on a large number of employees to support that growth. Now, some of those rookies have received emails that say “[IMPACTED] Departing Zoom: What You Need to Know.” Likewise, Google notified the employees who were expelled via email and blogpost.
“For those Zoomies who woke up to this news or read it after normal business hours, I’m sorry you’re finding out this way but we feel it’s best to notify all affected Zoomies. enjoy as soon as possible,” wrote Zoom director and founder Eric Yuan in a blog post.
He went on to explain that the pandemic has changed Zoom’s trajectory, but he’s proud of how it “mobilizes like a company to keep people connected”. But — in a similar way to Amazon, the sales forceAnd meta handle their massive layoffs — Yuan said Zoom has been hiring aggressively and not doing enough to consider whether its growth is sustainable.
“To do this, we needed to rapidly ramp up staffing to support the rapid growth of users on our platform and their growing needs. Within 24 months, Zoom grew. triple the scale to manage this demand while allowing innovation to continue,” Yuan wrote.
“We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes. We didn’t spend a lot of time thoroughly analyzing our teams or assess whether we are growing sustainably, towards the highest priorities.”
The cuts are happening across all organizations in Zoom. Yuan said the cuts were based on “critical priorities for long-term growth” and the company cut roles that were “too complicated or duplicated”.
Yuan said he will take a 98% pay cut next fiscal year and will forgo company bonuses for fiscal year 2023.
Affected US employees will be offered 16 weeks of salary and healthcare, a performance-based bonus for fiscal year 2023, stock options, and various outsourcing services.
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Zoom, founded in 2011, has focused on winning more large enterprise customers since the pandemic. The company discovered demand for paid services from small and medium enterprises is uneven. In November, it reported Revenue in the third quarter of 2023 was $1.1 billion, of which $614 million came from 209,000 enterprise customers. It will announce the fourth quarter of fiscal year 2023 and the full earnings of the fiscal year on Monday, February 27.
