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After an unfathomable boom at the onset of the pandemic, Zoom has made the decision to cut 15% of its staff, or 1,300 people.
“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,” CEO Eric Yuan wrote in a blog post addressed to “Zoomies.”
In the first 24 months of the pandemic, Zoom grew its staff three-times over to manage a sudden increase in demand, when the company experienced five straight quarters of triple-digit year-over-year growth. That growth naturally slowed down, but Zoom has remained on a steady upward trajectory. When the twelve-year-old company last reported quarterly earnings in November, revenue had increased 5% year-over-year to $1.1 billion; though online revenue dropped 9%, enterprise revenue increased by 20% to $614.3 million. Zoom also reported $272.6 million in free cash flow.
“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,” Yuan wrote. He will cut his salary by 98% and decline his bonus; he said that executive leadership will reduce their pay by 20% and also forfeit their bonuses.
According to Forbes, Yuan’s net worth is $3.9 billion.
Impacted employees will receive up to 16 weeks’ salary and health coverage, plus their bonus from last year. They will also have access to stock option vesting and services to help them find new jobs.
Update, 2:27 PM ET, 2/7/23: A previous version of the article said that the company spent $14.7 billion to acquire cloud call center Five9. The deal did not go through.