Zoom cuts workforce by 15% as pandemic-driven demand wanes

While announcing the layoffs on Tuesday, which will hit nearly 15% of its workforce, the chief executive officer, Eric Yuan, said he would take a pay cut of 98% for the coming fiscal year and forgo his bonus.

Zoom will incur about $50m to $68m in charges related to the layoffs, according to a regulatory filing on Tuesday. The company said a substantial part of it will be spent in the first quarter of fiscal 2024.

The company, which became a household name during lockdowns due to the popularity of its video-conferencing tools, has seen its revenue growth slow, and profits are estimated to have fallen 38% in 2022.

Zoom had bumped up hiring during the pandemic to meet surging demand, but now joins US companies in reining in costs to brace for a potential recession.

The announcement is the latest in a raft of layoffs that have hit the tech sector, from Amazon to Meta to Google. Companies have laid off thousands this year to ride out a downturn in demand wrought by high inflation and rising interest rates.

The video-conferencing software maker also said that its executive leadership team will reduce their base salary by 20% in the same period.

Departing employees will receive 16 weeks of salary, healthcare coverage and a bonus for the year, Yuan said.