Zoom Video Communications Inc announced on Tuesday, February 7, that it is reducing its workforce by 15 per cent, accounting for 1,300 employees.
Zoom joins the list of other tech giants, including Amazon, Facebook, Google, and others, who are slashing their workforce due to volatile economic conditions and expected recession.
The announcement from Zoom came as the demand for video conferencing services slows down.
In a blog post, Eric S. Yuan, CEO of Zoom says, “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 per cent and foregoing my FY23 corporate bonus. Members of my executive leadership team will reduce their base salaries by 20 per cent for the coming fiscal year while also forfeiting their FY23 corporate bonuses,” Yuan adds.
However, in the regulatory filing, Zoom mentioned that the salary reduction for the CEO and other executive officers was a temporary measure. After a 98 per cent cut, Eric S. Yuan will get $10,000 for fiscal 2024.
“The Compensation Committee of the Company’s Board of Directors may review, change or end the temporary salary reduction program at its discretion in the future,” the filing reads.
As a part of the process, Zoom will incur about $50M to $68M in charges, according to a regulatory filing on Tuesday. Zoom says it will spend a substantial part of it in the first quarter of fiscal 2024.
“While we have to take these steps today, we will continue to invest in key strategic areas to help us reach our vision,” says Yuan.
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