Zoom to fire 1,300 employees, its CEO to take 98 per cent pay cut

The impacted Zoom employees from the US will receive up to 16 weeks’ salary.

California, Feb 08: Zoom has joined the growing list of technology companies that fired their employees recently in view of slowdown in business after the boom during the COVID-19 pandemic.

The Communications technology company has announced that it is laying off about 1,300 workers or 15 per cent of its workforce. "Over the past few years, Zoom has become an indispensable source of connection for businesses and individuals as well as a globally recognized brand. Whether you have been at Zoom since the beginning or joined us more recently, you've played an important role in our evolution, and that makes today's announcement particularly difficult. We have made the tough but necessary decision to reduce our team by approximately 15% and say goodbye to around 1,300 hardworking, talented colleagues," Zoom's Chief Executive Officer Eric Yuan told the employees on Zoom blog.

The employees who are being shown the door would get an e-mail that reads '[IMPACTED] Departing Zoom: What You Need to Know'. "I know this is a difficult message to hear, and certainly not one I ever wanted to deliver. If you are a US-based employee who is impacted, you will receive an email to your Zoom and personal inboxes in the next 30 minutes that reads [IMPACTED] Departing Zoom: What You Need to Know. Non-US employees will be notified following local requirements. For those Zoomies waking up to this news or reading this after normal work hours, I am sorry you are finding out this way but we felt it was best to notify all impacted Zoomies as soon as possible," he added.

When the world was battling Covid-19 and work-from-home became a new norm, the demand for the software communications and services witnessed unprecedented growth. This led the IT companies to hire more people. As the situation started returning to normalcy and employees are being asked to come to office, the companies are taking cost-cutting measures and the matter only became worse due to economy slow down.

"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. To make this possible, we needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs. Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation.

We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes. We didn't take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities," Eric Yuan said in the blog.

He added, "As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom. But the uncertainty of the global economy, and its effect on our customers, means we need to take a hard - yet important - look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom's long-term vision."

The Zoom CEO also revealed that he is taking 98 per cent paycut and letting go off his corporate bonus for the financial year 2023."As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today- and I want to show accountability not just in words but in my own actions. To that end, I am reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus. Members of my executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting their FY23 corporate bonuses," he stated.

What will the impacted employees get?

According to him, the impacted employees of the US will receive up to 16 weeks' salary and healthcare coverage and payment of your earned FY'23 annual bonus based on company performance.

The non-US employees in the RSU (restricted stock units) and stock option vesting for 6 months for US employees and through August 9, 2023 along with outplacement services that include 1:1 coaching, workshops, networking groups, and more.