Many tech giants, like Google, Amazon, and Dell, are firing staff members as a cost-cutting tactic to maintain the viability of the company. Zoom has now joined this list. Zoom’s video conferencing services are what are failing to grow. Result? Layoffs. As the demand for video services has decreased in the post-pandemic world, Zoom Video Communications Inc (ZM.O) said on Tuesday that it will lay off around 1,300 of its employees.

CEO Eric Yuan announced the layoffs, which will affect roughly 15% of the company’s workers, and said he would forgo his bonus and accept a 98% salary reduction for the upcoming fiscal year. Earlier as well, shares of Zoom video fell to about 90% in comparison to October 2020 because of the pandemic boom fade out. Shares closed up 9.9% on the announcement of the news. 

“We worked tirelessly… but we also made mistakes. 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 said. Yuan said that the laid-off employees will get salary of 16 weeks along with healthcare coverage and a bonus for the year. 

According to a regulatory filing made on Tuesday, Zoom will incur costs associated with the layoffs of between $50 million and $68 million. The business stated that the first quarter of fiscal 2024 will see the most of it spent.

The business’s revenue growth has slowed after its video conferencing technologies helped it become well-known during lockdowns. Zoom increased recruiting during the pandemic to keep up with the high demand. However, the company is now joining businesses in cutting expenses to prepare for a future recession. The maker of video conferencing software also announced that over the same time period, its executive leadership team will see a 20% reduction in base pay.

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