The company has also chosen to reduce the base salary of its senior executives by 20%.
Zoom Video Communications announced this Tuesday, February 7, that it will cut 15% of its workforce, about 1,300 jobs. In addition, it will reduce the base salary of its high-ranking executives due to a slowdown in demand for its video conferencing services. The company’s shares were up about 9% on the news, after losing 63% last year.
Announcing the layoffs, Chief Executive Eric Yuan also said he will take a 98% pay cut for the next fiscal year, forgoing his 2023 corporate bonus. “We worked tirelessly…but we also made mistakes. We didn’t take the time we should have to take a hard look at our teams or assess whether we were growing sustainably, towards priorities,” Yuan said.
The video conferencing software maker also said that His executive leadership team will reduce his base salary by 20% in the same period.
Zoomwhich became a household name during lockdowns due to the popularity of its video conferencing tools, has seen its revenue growth slow.
Analysts estimate Zoom’s revenue rose just 6.7% in fiscal 2022 after more than quadrupling in 2021.. The company’s profits multiplied by nine in 2021 and it is estimated that last fiscal year they decreased by 38%. Zoom increased hiring during the pandemic to meet growing demand.
A number of US companies, including Goldman Sachs Group Inc., Alphabet Inc., among others, have laid off thousands of people this year to overcome a slump in demand caused by high inflation and rising interest rates.
With information from Reuters.
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