In an official company blog post this Tuesday, Zoom CEO Eric Yuan explained how his firm would lay off roughly 15 percent of its employees. The lay-offs account for around 1,300 Zoom staff members.
Zoom has become an indispensable source of connection for businesses and individuals as well as a globally recognized brand. Whether you have been at Zoom since the beginning or joined us more recently, you’ve played an important role in our evolution. – 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.
Yuan also said he is “accountable for these mistakes and the actions we take today.” In response to his company’s actions, Yuan will reduce his salary by 98 percent and forego his FY23 corporate bonus.
Moreover, Zoom will reduce executive leadership base salaries by 20 percent in 2023 while also forfeiting FY23 corporate bonuses.
Zoom will also help its laid-off staff members with a care package to assist them in their career transition.
In addition, the firm’s CEO confirms that, moving forward, Zoom will continue to build its brand and evolve its product portfolio to provide a “new kind of productivity.”
Why Is Zoom Laying Off 15 Percent of Its Staff?
The news comes as Zoom plans to double down on its portfolio as an avenue for enterprise-grade remote collaboration and customer engagement solutions.
Previously, due to the COVID-19 pandemic, Zoom experienced mass adoption due to international lockdowns.
Zoom faces a reduced consumer user base as the world returns to a pre-pandemic lifestyle. Although, despite dwindling consumer usage, the firm predicts that its enterprise coverage will support the firm in the future.
During its Q3 earnings call, Zooom reported that period revenue reached $1.1BN, lower than pandemic projections.
Although, the post-pandemic drop in earnings hides the fact that Zoom’s enterprise goals are scaling in the background.
The firm recently debuted Zoom Contact Center and Zoom IQ for Sales, which boosted the firm’s foothold in enterprise collaboration and customer experience (CX) solutions.
As part of the earnings calls, Kelly Steckelberg, the Chief Financial Officer at Zoom, stated the firm’s strength in distributing new enterprise solutions primarily drove its Q3 revenue growth.
The CFO confirmed that Zoom’s enterprise business represented roughly 56 percent of Zoom’s Q3 total revenue – up from 49 percent in 2022.
What Are Zoom Contact Center and IQ for Sales?
With its transition from consumer to enterprise solutions, Zoom is working on delivering CCaaS and UCaaS services.
The remote communications firm is diving into new business solutions via its fresh enterprise product portfolio.
For example, Zoom Contact Centre provides clients with a CCaaS solution that integrates no-code virtual agent-building tools, analytics, and CRM/WFM considerations.
On the other hand, Zoom IQ for Sales is a conversation intelligence software that the firm distributes to business clients following the service’s launch in 2022.
The service enables managers to review metrics and compare performance across a sales team, helping a team leader apply crucial improvements across a workforce.
IQ for Sales analyses calls to discover the most successful CX practices and identify what most attracts or deters potential customers.
Zoom Contact Center and IQ for Sales integrate the firm’s Team Chat UCaaS platform to secure clients with unified communications opportunities.
As Zoom significantly invests in its business-facing solutions amidst tricky financial reports, the risk seems to indicate reward. Although with cut salaries and staff, Zoom must prepare to stand its ground moving forward.