Arnd Wiegmann / Reuters
With the uncertain economic outlook in the post-epidemic era, many large companies have chosen to downsize and eliminate some unprofitable projects at this time. Zoom is the latest, opting to lay off about 1,300 people, or about 15% of its workforce.existinternal letter to employeesIn the article, CEO Eric Yuan pointed out that during Zoom’s major expansion during the epidemic, the number of employees grew too fast, and the expansion tripled in just two years. This prevents the company from “sufficiently analyzing team composition and assessing how to sustainably progress toward the highest goals.”
Yuan does not think the end of the epidemic is a threat to Zoom, and pointed out that even if people start to return to office life, there are still many processes that have been habitually switched to Zoom, and these habits will not disappear. However, under the uncertain economic outlook, Zoom still needs to critically examine whether the company can reorganize its internal organization to provide the services customers need and achieve Zoom’s long-term vision.
Zoom’s top executive team will take a 20% pay cut in fiscal 2023, while Yuan himself will take a 98% pay cut, and none will receive a year-end bonus. American employees who are laid off will receive 16 weeks of salary and health insurance compensation, bonuses due in fiscal year 2023 and assistance in finding new jobs; while international employees will be given similar compensation in accordance with local regulations.
So far, Amazon, Alphabet, Microsoft, Dell, and Spotify have all made large-scale layoffs, which is the largest wave of layoffs in the technology industry since the 2008 financial tsunami. However, this is after the large expansion during the epidemic, so it is more just to correct it back to a more appropriate size.
