Zoom Drastically Downsizes As Lockdown Demand Falters, CEO Will Reduce His Own Salary By 98%

Zoom announced Tuesday that they had acquired Company It would lay off 15% of its employees to meet the rising demand from government Lockdown The decline in mandates is not stopping.

Eric Yuan, Zoom CEO, said in a Memo According to the company, approximately 1,300 people would lose their jobs. He also mentioned broader factors such as slower new demand. economic Uncertainty and the effects it has on customers’ willingness to spend money on services

“We built Zoom to remove the friction that businesses felt when collaborating. Our trajectory was forever changed during the pandemic when the world faced one of its toughest challenges, and I am proud of the way we mobilized as a company to keep people connected,” The executive wrote. “To make this possible, we needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs.”

The company tripled in size in just two years but did not realize it. “take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities.” The executive team will reduce their base salary by 20% and forfeit any corporate bonuses. Yuan, however, will keep his bonus of 98% and his base salary.

Following the announcement, shares of Zoom rose 9.9% Tuesday. The company’s stock has declined 40.7% over the past year, significantly underperforming the S&P 500 Index and the technology-heavy NASDAQ Composite.

Many companies permitted employees to work from their homes when offices were shut down in the United States three years ago. However, many companies have had difficulty getting workers back into the office since the mandates ended. According to a survey, remote and hybrid workers cite the primary benefits of avoiding commutes and new opportunities to better balance work and life. Poll Gallup.

However, virtual work arrangements can cause employers significant costs: 85% say that the transition to hybrid work is a good idea. “has made it challenging to have confidence that employees are being productive,” According to a Study Microsoft

Many executives expressed a preference that employees stop working remotely. Tesla CEO Elon Musk Submitted The electric automaker employs workers who work remotely. “no longer” Acceptable and commented on social media by those who disagree with this new rule “should pretend to work somewhere else.” Musk was present at a meeting with Twitter employees just before the purchase of the social media company was closed. Frequently Asked Questions His concerns about remote work led him to declare that working remotely is a good option. “on location physically” It is superior to all other arrangements.

Zoom’s dismissals follow other technology company headcount reductions. Microsoft, Google and Amazon revealed Their intention to decrease their payrolls by more then 40,000 combined workers over these weeks was a result of key investors noting that rapid increases in pay have led to lower profitability. In response to increased consumer demand, many companies increased their workforces during the lockdown-induced recession.

According to a survey, 66,000 workers were dismissed from the top tech firms in the first 30 days of 2023. Report Crunchbase says that even though companies in this sector have eliminated some 140,000 jobs last year, Crunchbase estimates that this number is still high.