Video-conferencing firm Zoom, which enjoyed a meteoric rise during the COVID-19 pandemic, has become the latest tech firm to announce job cuts.
The company has announced plans to let go of 1 300 employees, or 15% of its workforce, as the large-scale job layoffs in the technology sector continue to escalate.
In a memo to employees, Zoom CEO Eric Yuan says: “Over the past few years, Zoom has become an indispensable source of connection for businesses and individuals, as well as a globally-recognised brand.
“Whether you have been at Zoom since the beginning, or joined us more recently, you’ve played an important role in our evolution, and that makes today’s announcement particularly difficult. 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.
“I know this is a difficult message to hear, and certainly not one I ever wanted to deliver. If you are a US-based employee who is impacted, you will receive an e-mail to your Zoom and personal inboxes in the next 30 minutes that reads ‘[IMPACTED] Departing Zoom: What You Need to Know’. Non-US employees will be notified following local requirements.
“For those Zoomies waking up to this news or reading this after normal work hours, I am sorry you are finding out this way, but we felt it was best to notify all impacted Zoomies as soon as possible.”
Zoom’s announcement follows hot on the heels of Dell Technologies, which this week also revealed it is cutting 6 650 jobs, or about 5% of its global workforce.
A recent report by TradingPadia revealed the massive job cuts announced in the tech sector in 2022 are spilling into 2023, with Amazon and Microsoft announcing staff reductions within two weeks of each other, earlier this year.
Other global tech companies that have retrenched include IBM, Google, Meta, SAP, Salesforce, Paypal, Twitter and Salesforce.
Locally, JSE-listed internet giant Naspers trimmed its entire workforce by about 30%, while crypto-currency firm Luno made a similar move.
Zoom’s star started rising at the onset of the COVID-19 pandemic, as more people took to the video communication platform to work or study from home.
During its heyday, in 2021, for the first time, the company posted over $1 billion revenue in a single quarter.
However, as the COVID-19 restrictions were eased in many countries, the company started seeing its revenue dwindling as a result of people returning to offices or schools.
The company also faced stiff competition from rival video collaboration platforms, such as Microsoft Teams, Webex and Google Meet.
Adds Yuan: “We built Zoom to remove the friction that businesses felt when collaborating. Our trajectory was forever changed during the pandemic, when the world faced one of its toughest challenges, and I am proud of the way we mobilised as a company to keep people connected.
“To make this possible, we needed to staff-up rapidly to support the quick rise of users on our platform and their evolving needs. Within 24 months, Zoom grew three times in size to manage this demand while enabling continued innovation.
“We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes. We didn’t take as much time as we should have to thoroughly analyse our teams, or assess if we were growing sustainably, towards the highest priorities.
“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.”
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