Zoom fires 1,300 employees due to "uncertainty of global economy"
Companies are on a firing spree, and Zoom is no exception. The communications technology firm announced that it is axing roughly 15% of its global workforce or around 1,300 employees. Zoom claims to have scaled up rapidly during the COVID-19 pandemic without checking whether the growth was sustainable or not. Now, "each organization" at the company will be impacted by the cuts.
Why does this story matter?
With each passing day, Zoom is facing more competition from apps like Microsoft Teams and Google Meet. To tackle them, it needs to reduce costs and has thus resorted to job cuts. Zoom claims that it is trying to navigate through the "uncertainty of the global economy" by doing a "reset" to steer the ship. Whether it will be successful remains to be seen.
What's the reason behind the job cuts?
During the pandemic, people had to work from home and they used video chat software like Zoom to stay in touch with others. Within just 24 months, Zoom grew three times in size and hired more people to meet the demand. Now, as the world has returned to normalcy, the company feels the growth was unsustainable and consequently has to let go of workers.
How will the laid-off employees be supported?
In the US, axed employees will receive up to 16 weeks of salary and healthcare coverage, RSU and stock option vesting for six months, the earned FY23 annual bonuses, and outplacement services. The latter will include workshops, one-to-one coaching, networking groups, and more. Outside the US, the severance packages will be "similar and will take into account local laws."
The top management will also take salary cuts
CEO Eric Yuan will forego his FY23 corporate bonus, and draw 98% less salary for the coming fiscal year. Meanwhile, the members of the executive leadership team will also forfeit their bonuses and reduce their base salaries by 20% for the rest of the year.
Other companies have also put employees on the chopping block
Besides Zoom, companies like Patreon, Peloton, and Spotify have also blamed hiring sprees during the pandemic as the reason behind layoffs. Talking about the tech industry at large, giants like Amazon, Meta, Google, IBM, and Microsoft have fired workers en masse. Even back home, firms like Wipro, Infosys, and BYJU'S have taken similar steps. The job scenario seems to become bleaker.
