The losses are set to impact every part of the company, while the executive team plans to take pay cuts for the next fiscal year.
Zoom has announced plans to reduce its workforce by roughly 15pc, as global economic uncertainty impacts yet another tech company.
The video-conferencing company had a rapid rise during the Covid-19 pandemic, as many organisations moved to remote working. Zoom said its staff numbers swelled by 300pc within 24 months to meet the rapid demand.
But the company’s profits waned last year as growth slowed and rival services continue to emerge. Last July, Marketwatch reported that Zoom’s shares dropped by more than 80pc from their peak in 2020.
Zoom CEO Eric Yuan said the “tough but necessary decision” to reduce the team is being made to help handle the current uncertainty in the economy.
“As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom,” Yuan said. “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 decision will affect roughly 1,300 staff working across every section of the organisation. In a message to staff, Yuan said departing employees in the US will receive up to 16 weeks of salary, healthcare coverage and a bonus for the year.
Yuan said he will be reducing his salary by 98pc for the upcoming fiscal year, while members of the executive team will be cutting their base pay by 20pc.
“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 said.
Zoom’s decision follows a wave of other tech companies that are cutting their workforces amid a market downturn.
Earlier this week, Dell Technologies revealed plans to eliminate around 6,650 jobs, or roughly 5pc of its total workforce worldwide.
Last week, PayPal revealed plans to cut 2,000 jobs, roughly 7pc of its global workforce, due to the “challenging macro-environment”. HubSpot and Workday also announced job cuts at around the same time.
Intel has also been impacted by the slump in PC sales, with plans to “right-size the organisation” as part of a cost-cutting strategy.
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