Zoom eliminates over 1,300 positions as interest in the company's video-conferencing services decreases as the pandemic winds down.

Tuesday's layoffs, which could affect nearly 15% of the company's workers, were announced by CEO Eric Yuan, who also announced he would forgo his bonus and accept a 98% pay cut for the upcoming fiscal year.

"We worked nonstop... But we weren't perfect either. We should have invested more time that we should have, analysing our teams in-depth or determining whether we were progressing consistently in the direction of our top priorities, Yuan claimed.

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

The business, whose video-conferencing technologies helped it become well-known during lockdowns, has had its revenue growth stall, and profits are predicted to have decreased by 38% in 2022.

Rishi Jaluria, an analyst at RBC Capital Markets, said: "I would say sequentially, maybe this is indicating us we shouldn't anticipate re-acceleration in the short term on the revenue side, but we may see further upside to margins for a business that is already profitable."

Zoom increased recruiting during the pandemic to keep up with the high demand, but now it joins other US businesses in cutting costs to prepare for a possible recession.

The move is the most recent in a string of cutbacks that have slammed the tech industry, including those at Google, Amazon, and Meta. To weather a decline in demand brought on by high inflation and rising interest rates, businesses have laid off thousands of workers this year.

The manufacturer of video conferencing software also announced that its executive leadership team would see a 20% reduction in base pay during the same period.

Employees leaving will receive 16 weeks of pay, healthcare benefits, and an annual bonus, according to Yuan.

An American communications technology firm headquartered in San Jose, California, is called Zoom Video Communications, Inc. (sometimes abbreviated as Zoom and styled as zoom). 

It offers videotelephony and internet chat facilities via a cloud-based peer-to-peer software system used for video communications (Meetings), messaging (Chat), phone calls (Phone), conference rooms for video meetings (Rooms), online events (Events), and contact centres (Contact Center).

Also Read: A Zoom patch for macOS fixes a bug that causes the mic to stay on after sessions.

It also offers an open system that allows third-party developers to develop custom solutions on its integrated communications platform (Developer Platform).

Former Cisco executive and engineer Eric Yuan established Zoom in 2011 and released its software in 2013. Due to Zoom's revenue growth and the software's apparent use and dependability, the company was valued at $1 billion in 2017, making it a "unicorn." In 2019, the company finished its initial public offering and saw its first profit. 

On April 30, 2020, the business became a member of the NASDAQ-100 stock index.

Following the adoption of isolation measures in reaction to the COVID-19 pandemic, Zoom's software usage began to rise noticeably globally in early 2020. Despite the company's efforts to address security and privacy concerns, its software products have come under public and media scrutiny.