Zoom on Tuesday said it will lay off about 1,300 employees, or approximately 15% of its staff, becoming the latest tech company to announce significant job cuts as a pandemic-fueled surge in demand for digital services wanes.
In a memo to employees, Zoom’s CEO Eric Yuan said the layoffs would impact every part of the organization. Yuan also said he and other executives would take a significant pay cut, after acknowledging he made “mistakes” in how quickly the company grew during the pandemic.
“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,” he wrote. “To that end, I am reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus.”
Yuan said members of the executive leadership team will reduce their base salaries by 20% for the coming fiscal year and forfeit their fiscal year 2023 bonuses.
Shares of Zoom rose nearly 9% in midday trading Tuesday following the announcement.
Zoom, more than most companies, came to define the early days of the pandemic, as many turned to its platform to video chat with friends and colleagues during lockdowns. By mid-2020, Zoom reported skyrocketing revenue fueled by a spike in business customers from the many companies forced to turn to remote work.
Yuan said the company staffed up “rapidly” during the early days of the pandemic to support the boom in demand as many turned to its platform to video chat with friends and colleagues. “Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation,” Yuan wrote.
Zoom stock declined significantly last year, however, as more workers returned to office life.
Zoom is far from the only pandemic darling to experience a sharp comedown. Peloton, for example, has gone through several rounds of layoffs. Much of Big Tech, which also grew fast during the pandemic, has since announced layoffs, too.
And late Tuesday, eBay (EBAY) said in a regulatory filing that it would cut about 500 jobs globally — about 4% of its employee base — during the next 24 hours.