Zoom Layoffs 1,300 Employees, CEO Eric Yuan Cuts His Own Pay By 98%

In Short--

• Zoom CEO Eric Yuan who earned over Rs 24 million yearly is taking 98 per cent salary cut.

• Zoom has announced layoff of 1,300 employees as part of its cost-saving measures.

• The CEO also promised to offer up to 16 weeks of salary and healthcare coverage to the laid-off employees.

Zoom, the online video platform that rose to prominence during the pandemic, is experiencing a slowdown from its previous glory days. Zoom announced on Tuesday that it would downsize around 1,300 employees, representing about 15% of its staff, according to a company blog post.

Zoom, a video communications company, saw supercharged growth fueled by the pandemic and a change to work-from-home culture. Yuan founded the California-based company in 2011. At its peak, the company's stock clocked in at $559 a share in October 2020.

But, like many companies that soared during the crisis, it had a rough landing — its stock is currently trading at around $80 a share (it went up about 10% post-layoff announcement).

Yuan cited the pandemic rollercoaster as a reason for the cuts in his message to staff. "Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation," he said.

Zoom is the latest tech company to announce large-scale layoffs. It is not the only tech company that has been impacted by the pandemic. Amazon, Google, Microsoft, and many other businesses have reduced their workforce in the last few weeks.

Yuan's base salary last year was $301,731, per Bloomberg. The cut will bring his salary down to $10,000.

Other executives at the company will also take pay cuts of 20% and forgo bonuses for the upcoming year, the filing added.

Laid-off "Zoomies," at least in the U.S., will receive "up to" 16 weeks of salary and healthcare.

Other CEOs of tech companies have taken pay cuts, though on much larger base salaries. Tim Cook cut his salary by 40%, which brought to $43 million.

David Solomon, the CEO of Goldman Sachs, cut his by 29%, which brought it down to $25 million.

The other benefits include RSU and stock option vesting for six months for United States employees and through August 9, 2023, for non-US employees.

The Tech company will also provide outplacement services, including 1:1 coaching, workshops, networking groups, and more.

“Support for Zoomies outside the US will be similar and will take into account local laws. If you are departing, please know that you will always be part of the Zoom family, and we are here to support you as you navigate what’s next,” Zoom said.