COMP NEWS – In response to declining profits, Zoom is cutting its workforce. In an attempt to keep layoffs to a minimum, its CEO is cutting his own pay by 98%.
Zoom, which became a hallmark of the COVID-19 pandemic, is the latest tech company now turning to layoffs as it looks to navigate life after it.
The company is laying off some 1,300 employees, or about 15% of its workforce, CEO Eric Yuan announced Tuesday in a note to staff. He did not specify the breakdown of U.S. and non-U.S. employees.
Members of Zoom’s executive team will also have their base salaries reduced by 20% for the next year and forfeit their corporate bonuses as well.
Yuan explained that Zoom — which he founded in 2011 — had scaled up rapidly to manage the demand of the pandemic, tripling in size within 24 months. But he also acknowledged it didn’t spend enough time assessing whether that growth was sustainable or “toward the highest priorities.”
Yuan took responsibility for those mistakes and said he would “show accountability” by reducing his salary for the coming fiscal year by 98%, as well as forgoing his 2023 corporate bonus. Members of Zoom’s executive leadership team will reduce their base salaries by 20% for the year and forfeit their corporate bonuses too, he added.
His base salary last year was $301,731, according to Bloomberg.
Departing staff will receive bonuses of up to 16 weeks’ salary, and their health care coverage will extend through severance as well.
Yuan offered support to departing “Zoomies” — including up to 16 weeks’ salary and health care coverage — and pledged that the layoffs would not be made in vain.
It’s not the only sign of changing times, coming right on the heels of the White House’s announcement that it will end the 2020 COVID emergency declarations in May (though the virus and long COVID will not disappear with them).
Zoom’s revenue skyrocketed during the first years of the pandemic, but its stock took a hit last year as people returned to offices and in-person events.
It’s one of many tech companies that experienced rapid growth during the digital-heavy days of the pandemic only to announce aggressive layoffs this year, citing high (although easing) inflation and fears of a possible recession .
To read more about Zoom’s layoffs, click here.
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