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Zoom Video Communications Inc. is eliminating 15% of its workers as the service that became ubiquitous during the pandemic adapts to slower growth.
The company will cut about 1,300 jobs as part of a restructuring, Chief Executive Officer Eric Yuan said Tuesday in a blog post. Yuan called himself “accountable” for the company’s issues and said he would reduce his salary and forgo his bonus.
“Our trajectory was forever changed during the pandemic,” Yuan said, adding that Zoom headcount tripled in two years. “We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably.”
The reductions are a bigger share of the workforce than cuts announced at enterprise software companies including Salesforce Inc., Microsoft Corp. and Workday Inc. The shares jumped as much as 10% on the news to $84.87. The stock plunged 47% in the 12 months through Monday’s close.
After gaining millions of users at the height of the pandemic, Zoom is now trying to reverse slowing growth by expanding its tools for business. Still, it has reported single-digit revenue increases for the last two quarters, and analysts project that sales have continued to decelerate in the current quarter.
Yuan, the founder of the San Jose, California-based company, said his base salary, which was $301,731 last year, will be cut 98% and he will give up a corporate bonus for the 2023 fiscal year. His total compensation for fiscal year 2022 was $1.1 million, according to a May 2022 filing. Others on the executive leadership will take 20% base salary reductions.
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