What’s going on:
Zoom has announced that it would be cutting approximately 1,300 jobs due to decreasing demand for their video conferencing services, and incur a charge of up to $68 million as a result.
Zoom CEO Eric Yuan added that he would reduce his own pay by 98% in the upcoming fiscal year, as well as renounce his bonus.
Analysts predict that the company’s revenue only increased by 6.7% in 2022, compared to the more than fourfold growth seen during the previous year.
Why it matters:
Zoom stepped up its recruitment tactics during the pandemic to meet growing demand, but now, like many other U.S. companies, they have to restrict costs in anticipation of a potential recession.
How it’ll impact the future:
To demonstrate their commitment to this plan, Zoom’s executive leadership team will reduce their base salaries by 20%.
This move deviates from other recent tech layoffs, which have suspiciously turned to massive layoffs before considering a deduction in executive pay. While a rare move, Zoom’s approach may normalize making job cuts a complete last resort.