[Asia Economy New York=Special Correspondent Joselgina] Restructuring triggered by the US tech industry is spreading.
Zoom Video Communications announced on the 7th (local time) through the company blog that it plans to cut about 1,300 employees, equivalent to 15% of its total workforce.
Amid ongoing recession warnings, Zoom, which has been considered a major beneficiary of the pandemic following Microsoft (MS), Alphabet, and Dell Technologies, has also joined the ranks of large-scale layoffs. Zoom is a company that grew rapidly as reliance on video conferencing software increased during the pandemic. However, this growth trend has recently stopped as office returns continue.
CEO Eric Yuan stated, "As the world adapts to life after (COVID-19), we need to adjust to the uncertainties of the global economy and how they affect our customers," adding, "We did not take the time to thoroughly analyze our team or whether we are growing sustainably. I take responsibility for this mistake."
Along with the layoffs, CEO Yuan cut his salary by 98% this year and decided not to receive a bonus. Executives will also reduce their salaries by 20%. Zoom is scheduled to announce its Q4 earnings for last year on the 27th.
In the US, as recession warnings grow louder, restructuring moves such as layoffs have been continuing mainly among tech companies since the second half of last year. MS, the third-largest company by market capitalization, announced last month that it would lay off 10,000 employees, equivalent to 5% of its total workforce. Google’s Alphabet also recently revealed plans to cut 12,000 employees, the largest in the company's history. This month, Dell Technologies announced it would lay off about 6,650 employees, or 5% of its total workforce.
Meanwhile, following the layoff news, Zoom’s stock price in the New York stock market was trading about 7.5% higher than the previous close in the afternoon.
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