Zoom Video Communications has cut 150 jobs or 2% of its workforce this week amid investors' push for efficiency, CNBC reported. This adds to the wave of layoffs happening across several tech companies. Zoom also confirmed that it plans to add to the workforce in different departments like AI, sales, and engineering.
According to layoffs.fyi, over 100 tech companies have laid off about 30,000 employees this month, marking a record start to the year in terms of job losses. January was the busiest month for layoffs in the tech industry since March 2023.
Zooming on Layoffs
Zoom’s popularity as a video conferencing platform exploded at the start of the Covid-19 pandemic as working from home became the norm. Organizations, universities, schools, and more turned to the video-conferencing platform to stay in touch with colleagues, friends, and family.
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However, as the restrictions were lifted and the world overcame the pandemic, Zoom’s stock has hit a downward spiral. This year, the shares of Zoom are down 10% and dropped almost 90% from their record high in October 2020, as per CNBC. The company has struggled to maintain revenue growth as well.
Last year in February, Zoom CEO Eric Yuan said that the company would reduce its headcount by 15%, bringing its workforce to just over 7,000 from about 8,500.
In the same month, Zoom laid off 1,300 workers, as the company braced for the uncertain economic conditions at the time. Zoom has not released details of its total headcount since January 2023.
However, the company has worked to move beyond its video conferencing service by venturing into a wider suite of applications for businesses, such as contact center software and persistent chat which is similar to Salesforce’s Slack. One of the company’s most significant services, Zoom Phone, recently hit seven million paid users.
January 2024 Hits Record High in Layoffs
Forbes reported that layoffs in January hit a 10-month high, with over 82,300 employees losing their jobs, citing data from a report by Challenger, Gray & Christmas. Several tech giants and startups, banks, and financial service companies have recently cut jobs and January saw the second-most layoffs in any month since January 2009.
Cloud software vendor Okta also announced it would cut jobs, telling employees that it’s laying off 400 staffers, or about 7% of its total workforce. Last month, tech giant, Microsoft cut 1,900 positions in its gaming division. Amazon has cut over 27,000 jobs since late 2022, with recent layoffs happening across its Prime Video, MGM Studios, Twitch, and Audible divisions. Despite strong figures, Amazon may be planning to cut more jobs this year, Business Insider reported.
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Further, Google reported that it has spent $2.1 billion on severance and other expenses in 2023 as it laid off over 12,000 employees in the 12 months. In January 2024 alone, the company spent another $700 million in employee severance charges as it laid off another 1,000 plus roles across its divisions.
