Additionally, the base salaries of the members of the Zoom CEO’s executive team will be reduced by 20% for the coming fiscal.
American video calling application Zoom announced laying off around 1,300 employees, or approximately 15% of its total workforce. The company’s chief Eric S. Yuan blogged about the decision and added that he will take a 98% reduction in his salary in the coming fiscal year.
Zoom’s move comes amid waning demand for video conferencing apps post-pandemic and as the world braces for a potential recession this year. “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,” Yuan said in a blog.
“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,” he added.
Additionally, the base salaries of the members of the CEO’s executive team will be reduced by 20% for the coming fiscal and corporate bonuses for the financial year 2023 will also be forfeited. The layoff will impact each organization across the company, the blog noted.
Zoom has offered a 1:1 check-in to the departing employees with their respective bosses. For the affected full-time employees working in the U.S., the company has promised to provide up to 16 weeks’ salary, healthcare coverage, and payment of earned FY23 annual bonus based on company performance, among others. For the affected workers outside of the U.S., a similar support structure is promised, considering local laws.
According to a Reuters report, citing the company’s regulatory filing, the layoffs would cost Zoom about $50 million to $68 million. A substantial part of this will be spent in the first quarter of fiscal 2024, it added.
Several Wall Street tech giants like Alphabet, Microsoft, Meta, and Twitter have previously trimmed their workforce as they brace for a global economic slowdown. In a nutshell, a setback in consumer spending due to high inflation and the threat of a looming recession this year has pushed corporates to keep a lid on their spending.