After Google, Microsoft and many other technology giants, Zoom, the company that developed a video calling platform and broke into our lives during COVID19 announced that it will lay off about 15% of its employees. The CEO and founder of the company will reduce his salary by 98% during the upcoming year and forgo his bonus for 2023. The other senior executives of the company will also suffer a salary reduction of about 20%.
Zoom, the company that developed software for managing remote meetings and lectures through multi-participant video calls, is joining the huge wave of layoffs and announced that it will cut about 1,300 jobs, which is about 15% of the company’s total employees.
At the same time, the CEO and founder of the company, Eric Yuan, announced that he will reduce his salary by 98% for the coming year and forgo his bonus for 2023. In addition, the rest of the company’s senior executives will also suffer a salary reduction of About 20% during 2023. In the period to the announcement, the company’s stock jumped about 10% in trading on the NASDAQ stock exchange.
In recent weeks, Spotify, Alphabet (Google’s mother company), and Microsoft have announced massive layoffs as well; Spotify will lay off about 700 employees, Microsoft about 10,000, and Google about 12,000. The layoffs at Google include employees from several different sectors within the giant company- engineers, product teams, and headquarters positions.
The CEO of the streaming giant, Daniel Alec, posted that “During the past few months, we made a considerable effort to curb costs, but it was simply not enough. I was too ambitious in our investments in anticipation of revenue growth.”
Sanodhar Pichai, CEO of Alphabet, stated in an internal letter he sent on the subject that “I am full of confidence in the enormous opportunity before us, in light of the strength of our mission, the values of our products and services, and our early investments in the field of artificial intelligence.”
According to a statistics website, as of 2021, Alphabet employed approximately 156,000 employees worldwide. In other words, the current layoffs mean a cut of about 7.5% of the company’s global workforce. Against the backdrop of the global trend, Google reported revenues of $69.09 billion in the third quarter of 2022, thus missing analysts’ forecasts of revenues of $70.7 billion. At the same time, the company’s net profit also continued to decrease and reached 13.91 billion dollars, after a 26.5% decrease.
A few days before Google, Microsoft also announced a cut of 5% in its workforce, which stand at 220 thousand worldwide. Satya Nadella, the CEO of Microsoft, sent a letter to employees saying “this is one of those difficult decisions that we have had to make in the 47 years of the company in order to remain significant in this industry, which is unforgiving towards those who are not willing to embrace changes.” These are the most extensive layoffs made at the company in about eight years, when about 25 thousand workers were fired between 2014 and 2015.
According to Nadella, the move is expected to cost the company about 1.2 billion dollars, including compensation grants and related expenses. At the same time, Nadella noted that the company will continue to recruit in “strategic areas,” and called the latest advances in artificial intelligence “the next big thing in computing.” The current announcement came after the company already confirmed last October that it had begun a process of layoffs, after announcing in July that it planned to cut a little less than 1% of all its employees.
The latest moves by Spotify, Google, and Microsoft come after several other tech giants have announced similar moves in recent months. At the beginning of the month, Amazon announced the layoff of 18,000 employees, which is about 6% of its workforce; The day before, Salesforce announced the layoff of 8,000 employees, which is about 10% of its workforce, and in November Meta also announced the layoff of 11,000 employees (13% of the workforce).