Zoom to lay off 15% of its workforce, or about 1,300 employees as its stock fell from peak of $559 to $85

Zoom, the video conferencing company that made billions amid the 2020 pandemic, announced Tuesday it plans to cut about 1,300 employees or 15% of its workforce.

In a blog post on the company’s website, CEO Eric Yuan said: “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.” Yuan added that the company needs to adapt to the “uncertainty of the global economy” as well as “its effect on our customers” as the world continues to adjust to life after the Covid pandemic.

The layoff announcement is the latest in a series of job cuts in the tech industry. Yesterday Dell announced plans to lay off 6,650 workers. In January, Google also said it plans to lay off more than 12,000 workers, while Microsoft revealed it plans to cut 10,000 employees and Salesforce announced plans to lay off 7,000 workers.

Once the darlings of investors amid the 2020 pandemic when its stock was trading at its peak of $559, Zoom stock is now trading below $85 as of the time of writing. Zoom became popular during the pandemic as governments around the world placed millions of people on lockdown and forced them to stay in their homes. With nowhere else to go, millions turned to Zoom’s conference technology in order to keep up with school, work, or socializing.

“We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes,” Yuan said. “We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities,” Yuan wrote in a blog post.

Per the blog post, the cuts will impact every organization across Zoom, and employees who are laid off will be offered up to 16 weeks of salary and healthcare coverage. The CEO also said he plans to reduce his own salary for the coming fiscal year by 98%, and he is also forgoing his 2023 corporate bonus.

“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 email 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 also admitted the company made some mistakes. “We worked tirelessly and made Zoom better for our customers and users. But we also made mistakes,” adding that the company “didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities.”

“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today– and I want to show accountability not just in words but in my own actions,” Yuan said in the blog post.

In April 2020, Zoom grew by over  50 percent in just 3 weeks, topping 497,000 customers with more than 10 employees, up from 81,900 in January 2020. Zoom said user growth could slow or decline as more people get vaccines and return to work or school in person.

Zoom was founded in 2011 by Eric Yuan. Just like all immigrants looking for a better life, Yuan immigrated to the United States from China in the mid-90s because of the Internet. Yuan’s visa application was denied 8 times before he came to the U.S. Today, Yuan is worth over $12 billion.