Zoom CEO Takes A Pay Cut After Laying Off 1,300 Employees And Sends Stock Price Soaring—Earning Him More Money

 

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.

 

CEO Eric Yuan said in the memo to employees, "As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today and I want to show accountability not just in words but in my own actions," Yuan wrote. "To that end, I am reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus." He added, “Members of my executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting their FY23 corporate bonuses.”

 

The former video highflyer is yet another tech company that has added to the ever-increasing number of layoff announcements. Similar to Meta, Amazon, Google, Microsoft and other tech giants, Zoom aggressively hired, believing the good times will never end. Yuan wrote, “Our trajectory was forever changed during the pandemic when the world faced one of its toughest challenges, and I am proud of the way we mobilized as a company to keep people connected. To make this possible, we needed to staff up rapidly to support the quick rise of users on our platform and their evolving needs. Within 24 months, Zoom grew 3x in size to manage this demand while enabling continued innovation.”

 

Now faced with record-high inflation, interest rate hikes and a challenging economy, the video platform, like many other pandemic winners, is cutting costs and reigning in expenses to adapt to the new austere environment.

 

The Trend Of CEOs Taking Pay Cuts

 

Shareholders, activist hedge funds and corporate boards have taken action against CEOs who misjudged the changing economic landscape by hiring too many people too quickly, incurring high costs. CEOs, including Sundar Pichai (Alphabet), Tim Cook (Apple), Jamie Dimon (JPMorgan), David Solomon (Goldman Sachs), James Gorman (Morgan Stanley) and Pat Gelsinger (Intel), are all taking pay cuts. Despite the public relations show, no one needs to feel sorry for the top executives, as the most significant part of their compensation packages comes from stock rewards.

 

Source:  Forbes