Zoom Video Communications (ZM) shares powered higher Tuesday after the video conferencing specialists said it would slash around 15% of its global workforce, adding to a savage start to the year for tech job losses.
Zoom said the layoffs, which amount to around 1,300 jobs, would come alongside a 98% pay cut for CEO Eric Yuan, who will also forego his fiscal 2023 bonus. Zoom's leadership team will also reduce their salaries by 20% for the coming fiscal year, and bypass bonus payments as well.
"Over the past few years, Zoom has become an indispensable source of connection for businesses and individuals as well as a globally recognized brand," Yuan said in a post on the company's official blog. "Whether you have been at Zoom since the beginning or joined us more recently, you’ve played an important role in our evolution, and that makes today’s announcement particularly difficult."
'We have made the tough but necessary decision to reduce our team by approximately 15% and say goodbye to around 1,300 hardworking, talented colleagues," he added. "I know this is a difficult message to hear, and certainly not one I ever wanted to deliver."
Zoom shares were marked 6% higher in early afternoon trading following the job cuts announcement to change hands at $81.65 each.
Earlier Tuesday, Boeing BA said it would cut around 2,000 jobs over the coming months as American companies across all sectors of the economy continue to tighten their belts in anticipation of a weaker global economy.
The move followed similar announcements from major U.S. companies over the past few weeks, mostly from the tech sector, as it braces for an extended slump in consumer demand.
Dell Technologies said last week that it's likely to eliminate around 6,650 jobs, the report indicated, taking its headcount levels back to the lowest since 2017, as market conditions “continue to erode with an uncertain future”, according to a company memo first reported by Bloomberg.
Late last month, IBM (IBM) said it will cut around 3,900 jobs, a figure that represents around 1.5% of its global workforce, a move it linked in part to last year's spin-off of Kyndryl and the divesting of its healthcare data business.
Google parent Alphabet (GOOGL) unveiled plans in January to cut around 12,000 jobs from its global workforce, a move that swiftly followed plans from Microsoft (MSFT) to slash around 5% of its global workforce, and take a $1.2 billion charge against its second quarter earnings, as it looks to 'align costs' with customer demand.
The Challenger job cuts report for January showed U.S. corporate layoffs rose 136% from last year to just under 103,000. JOLTs data for the month of December, however, indicated around 11 million open positions, the highest since early summer.
Late last year, Zoom said adjusted profits for the three months ending in October were pegged at $1.07 per share, firmly ahead of Street forecasts, as revenues rose 5% to a Street-beating 1.1 billion.
Looking into the final months of 2022, however, Zoom said it sees revenues in the region of $1.095 billion and $1.105 billion, just shy of Refinitiv estimates, with a lower-than-expected tally of between $4.37 billion and $4.38 billion for the coming fiscal year.
