Zoom Lays Off 1.300 Employees, User Growth and Profits Slow Post-Pandemic

Illustration (doc. Zoom)

JAKARTA - Another technology company that is cutting workers, Zoom. A video conferencing application that had skyrocketed its name when the COVID-19 pandemic peaked.

Zoom is said to be carrying out Termination of Employment (PHK) for its 1.300 employees, which affect 15 percent of its workforce.

This step is claimed to be a response to slowing user growth and profits which are also dropping continuously.

"As the world shifts to post-pandemic life, we see that people and businesses continue to rely on Zoom," said Zoom CEO Eric Yuan in a message to employees shared by the company.

Global Economy

"But global economic uncertainty, and the impact it has on our customers, means we need to take a hard, but important effort to reorganize ourselves so we can cope with the economic environment, deliver our customers and achieve Zoom's long term."

To be fair, Yuan added he would reduce his salary by 98 percent in the fiscal year and other leaders would also take a 20 percent pay cut and bonuses would be eliminated, as the company focuses on ensuring it can weather the slowdown.

Yuan said the layoffs would affect every part of the company and were aimed at reducing duplicative roles and refocusing on the company's top priorities, as quoted by BBC International, Wednesday, February 8.

Zoom estimates the restructuring will cost $50 million to $68 million, with affected staff to receive 16 weeks of pay and guaranteed healthcare and other support.

"We work tirelessly, but we also make mistakes. We don't spend as much time as we should to thoroughly analyze our team or assess whether we are growing sustainably, towards the highest priority," said Yuan.

"As CEO and founder of Zoom, I take responsibility for these mistakes and the actions we took today - and I want to show responsibility not only in my words, but also in my own actions," he added.

In addition, Zoom in particular is also facing challenges as competing technology companies increase their video offerings.

The company's revenue more than tripled in 2020 and grew by around 55 percent in 2021. Last year, however, its profits slowed into single digits and its profits fell sharply. The company's shares jumped more than 8 percent after the announcement.

Zoom's decision marks him joining a growing number of other tech companies that are laying off employees.

Amazon, Meta, Microsoft, Google and Salesforce are among the other heavyweights who have announced massive layoffs, even earlier this month, saying the business boom they saw during the pandemic was over.

In addition to Zoom, more than 300 tech companies have laid off nearly 100,000 workers globally since the start of the year, according to Layoffs.fyi, which tracks the announcements.