Yahoo Finance Zoom to lay off 1,300 employees as work from home craze ends
Zoom is to make 1,300 layoffs, letting go of around 15pc of its workforce as the Covid-19 pandemic’s work-from-home culture comes to a crashing halt.
Eric Yuan, the chief executive, said: “We have made the tough but necessary decision to reduce our team by approximately 15% and say goodbye to around 1,300 hardworking, talented colleagues.”
California-based Zoom’s share price soared more than 7pc as the news broke, rising as far as $83 (£69).
Mr Yuan also pledged to reduce his salary by 98pc and forgo his annual bonus. The company boss is worth around $4bn, according to Bloomberg estimates.
The news comes as US-based “Big Tech” companies make rounds of redundancies amid slowing sales as the world returns to pre-pandemic ways of working which are less reliant on tech products.
Some estimates say as many as 85,000 tech employees have been made redundant since the start of 2023, raising questions around executives’ strategies and forward planning for the post-pandemic era after two years of stratospheric sales and profits.
In its last set of financial results for the three months to October 2022, Zoom’s sales increased 5pc.
Yet profits declined to $48.4m, down from $340m in the previous year’s reporting period.
Starting in March 2020 the entire world was forced into remote working within a matter of weeks as the Covid-19 pandemic swept the globe.
Strict home lockdown policies ushered in a golden era for tech companies which capitalised on demand that skyrocketed overnight.
Zoom’s share price more than doubled during the 12 months leading up to March 2021, briefly quadrupling its pre-pandemic valuation of $32bn in October 2020.
At the time of writing, the business was valued at around $24bn (£19.86bn), making it more than three times larger than aero engine maker Rolls-Royce.
Addressing staff as “Zoomies” in his Tuesday message Mr Yuan said: “As the world transitions to life post-pandemic, we are seeing that people and businesses continue to rely on Zoom.
“But the uncertainty of the global economy, and its effect on our customers, means we need to take a hard – yet important – look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision.”
The redundancies come around a fortnight before the video calling company is due to present its latest financial results for the three months up to the end of January.
Over the past two years Zoom became a byword for working from home, becoming a vital tool relied on by millions of remote employees worldwide.
