Layoffs continue hit the tech industry, and this week they came up with one of the biggest winners of the pandemic: Zoom.
Yesterday, the video conferencing platform cut 15 percent of its staff, or about 1,300 people. This comes after Zoom tripled its headcount in two years. “We haven’t spent as much time as we should have taken a close look at our teams or assessing whether we’re growing sustainably towards the highest priorities,” said Eric Yuan, CEO of Zoom, in an interview. statement announce a layoff. According to the US Securities and Exchange Commission, Yuan said he was “responsible for these mistakes” and promised to cut his pay by 98 percent and waive the bonus in 2023, reducing his compensation to about $10,000. registration.
Zoom is not alone. Big tech companies flourished as the Covid-19 pandemic shut down the world and pushed people to spend more screen time. Amazon added more 400,000 employees in 2020 and Meta, then Facebook, hired 13000. Zoom has gone from an obscure video conferencing platform to a household name. There were Zoom happy hours, weddings and memorial services. By the end of April 2020, the company stated 300 million members daily were on Zoom calls. It was most downloaded app on Apple devices in 2020 and informed Revenue for the fiscal year ending January 2021 was $2.6 billion, up 326 percent from the previous year.
Nearly three years later, Zoom’s dominance is waning. Competitors, especially Microsoft and Slack, are merging calls with email and other productivity tools. Zoom is experiencing market saturation and slipping into the Peloton problem, which is to say, most people who are willing to buy Zoom packages may have already done so. “Suddenly this market is much more complex than what [Zoom] previous experience,” says Will McKeon-White, infrastructure and operations analyst at research firm Forrester.
And as companies look to cut costs amid market uncertainty, Zoom could be left behind in favor of competing bundled services like Google Meet, Microsoft Teams and Slack. But for now, Zoom is still growing. His latest financial report shows an increase of about 5 percent year on year, but this is a sharp slowdown compared to Revenue Growth in 2021 by 55 percent year on year. The less people use zoom for entertainment, the more it becomes a business. And Microsoft Teams, the main rival of Zoom, has grown quieter, bypassing 270 million monthly users by early 2022.
Zoom seems to recognize that it needs to be more than just a video calling service. At the end of 2022 he announced plans to integrate email and calendar functionality into the platform, and deploy an AI-based chatbot to troubleshoot customer issues. It’s been added cartoon avatars and meeting templates, as well as a new feature called Zoom Spots, a video collaboration experience that is very similar to Zoom’s endless challenge, which will launch later this year.
Zoom succeeded because it was easy to use. It was also free if people called for less than 40 minutes. Up to 100 people can join at the same time. But other video call serviceslike Google Meet and Skype also offer free calls that last longer. And becoming synonymous with video calls wasn’t all that great. People have reported “Zoom fatigue” caused by the strange psychological effects of video chatting and watching their own faces for several hours a day.