Layoffs have impacted almost all major tech companies. Zoom is downsizing by 15 percent and may be shifting its focus away from live events.
This week, Zoom announced it was laying off approximately 1,300 staff, around 15 percent of its workforce. Zoom CEO Eric Yuan shared the news in an internal email and later on the Zoom website.
Additional information was included in a report filed with the U.S. Securities and Exchange Commission. This report included an estimate cost of the layoffs and connected costs of between $50 million to $68 million. Investors an analysts will be looking for more information at Zoom’s next earnings call on February 27.
Layoffs Spreading Across Tech
Layoffs have spread across the tech sector. Major companies such as Meta, Amazon, Google, Salesforce, Dell, eBay, and Microsoft all recently announcing layoffs.
According to tech layoff tracker layoffs.fyi, more than 100,000 staff have been laid off across 334 companies in 2023 already. Alarmingly, the same site tracked just under 160,000 employees laid off at over 1,000 for the whole of 2022.
In the past few months, large event tech companies such as Hopin, Bizzabo and Hubilo have all had layoffs. In contrast to previous rounds, none of the companies made public announcements about the layoffs.
Zoom’s Investment in Events
Zoom held its annual user conference Zoomtopia in November as a fully hybrid event. At the event it released several updates that boosted its offering for meetings and events. Earlier this year, the company released Zoom Sessions, a mid-range addition to its Zoom Event portfolio. The product supports single events in virtual, hybrid, or in-person formats. It sits between Zoom Webinars and fully-fledged Zoom Events.
Other video conferencing tools are also looking to expand their software offering into in-person and hybrid event production. This week, Verizon shared its ambitions for the sector. BlueJeans has added on-site production service capability and is partnering with 360-camera manufacturer Owl Labs.
Zoom says more than 7,000 customers have used Zoom Events, yet this is not the company’s main focus. Three hundred million users hold meetings on Zoom daily.
Zoom’s limited networking features have also recently come under fire from Tim Calkins, clinical professor of marketing at Northwestern University’s Kellogg School of Management.
Refocusing on Productivity
Boldpush founder Julius Solaris, Skift Meetings’ predecessor EventMB, shared on LinkedIn that the Zoom Events team may be under threat. Skift Meetings reached out to Zoom’s communications team, who would not comment beyond the CEO’s blog post.
Yuan’s post offers some insight into what led to the layoffs and the new plan for Zoom. “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,” said Yuan speaking about mistakes and unsustainable growth during the pandemic.
The post also suggests a strategy based on a core product rather than exploring new markets. “We need to take a hard—yet important—look inward to reset ourselves so we can weather the economic environment, deliver for our customers and achieve Zoom’s long-term vision,” said Yuan.
The refocus on a core unified experience comes through. “We still have a lot of hard work ahead of us to ensure we’re delivering an experience that enables a new kind of productivity – one that brings all the best tools and applications for modern, engaging collaboration into one destination,” said Yuan.
The same post and filings announced a salary cut of 98 percent and the foregoing of his corporate bonus. This gesture was widely covered in mainstream media. Some took it as an incredible leadership gesture, while others questioned the real commitment as Yuan’s net worth is at least $1.1 billion and was as high as $16.4 billion at the peak of Zoom’s stock price.
Zoom stock also shot up 10 percent following the announcement, from $77 to $84, but has since dropped back to the $77 mark. This is in the same range as before the Covid pandemic. Zoom stock reached a Covid-pandemic high of over $550 in October 2020.