On Tuesday, Zoom Video Communications announced an employee lay-off as the demand for video conferencing slowed after the pandemic. Its stock price went up by 9.85% to $84.66 per share on February 07. Yet, it is anticipated to go down by 0.09% to $84.58 apiece in the upcoming session.
The firm’s services slowed down due to weak pandemic-fueled demand. An analyst said it could cause related charges from $50.00 million to $68.00 million.
Moreover, the staff cutoff will affect 15.00% of their workforce, equal to about 1,300 people at Zoom.
During mid-2020, the video conferencing company reported high revenue. It is caused by increased demand due to customers from companies being forced to work remotely.
According to CEO Eric Yuan, the firm grew three times in managing demand while enabling continued innovation. However, its stock rapidly declined the previous year due to workers’ return to their offices.
Also, Zoom employees in America who were cut off will get up to 16 weeks of salary and healthcare coverage. Besides, they will receive their annual bonus, stock options, and outplacement services.
In addition, plenty of firms, from Goldman Sachs to Alphabet, have laid off staff. The move dealt with a demand downturn brought about by high inflation and increased interest rates.
Eric Yuan of Zoom Takes Huge Pay Cut
Yuan takes a massive salary pay cut after the announcement of the slash in labor headcount in Zoom. He will take a 98.00% cut for the upcoming fiscal year, giving up his 2023 corporate bonus. Also, the video conferencing firm’s executive leadership team will have a 20.00% reduction in their salary in the same period.
According to the CEO, the team worked tirelessly but also made mistakes. They were unable to take as much time to analyze their staff and assess their growth.
Additionally, the uncertainty of the global economy and its effect on customers can impact the long-term vision of Zoom.
