Video conferencing software developer Zoom announced Tuesday local time that it will lay off about 1,300 workers as the company’s video conferencing service slows with the waning of the epidemic, at a cost of up to $68 million (currently about RMB 462 million), according to Reuters.
Zoom shares, which have fallen 63 percent in the last year due to the plunge in tech stocks, closed up 9.9 percent after the news but were down slightly after hours. In announcing that it will lay off nearly 15 percent of its workforce, Yuan Zheng, the company’s chief executive, said he will take a 98 percent pay cut and forgo bonuses in the next fiscal year.
We worked tirelessly …… but we also made mistakes,” Yuan Zheng said. We didn’t spend enough time thoroughly analyzing our team or evaluating whether we were moving toward the highest priority sustainably.”
A regulatory filing Tuesday showed that Zoom will incur about $50 million to $68 million in costs from the layoffs. A large portion of that will be spent in the first quarter of fiscal 2024, the company said.
Analysts predict Zoom’s revenue will grow only 6.7 percent in fiscal 2022, after more than quadrupling revenue and nine-fold profit growth in 2021. Profits are expected to fall 38 percent in 2022.
Zoom increased hiring during the outbreak to meet surging demand, but is now joining the ranks of U.S. companies to control costs and prepare for a potential downturn.
The company also said its executive leadership team will reduce base salaries by 20 percent during the same period. Yuan Zheng noted that departing employees will receive 16 weeks of pay, health insurance and a bonus.
