Zoom shares rise again with layoffs on the way
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Zoom Video Communications (NASDAQ:ZM) shares edged up by 2.5% in pre-market trading Thursday after the cloud-based communications platform company said it would lay off 1,300 employees, or about 15% of its workforce, as its deals with a post-COVID-19 business slowdown.
Zoom (ZM) made the announcement in a memo to employees on Tuesday. Chief Executive Eric Yuan posted details of the layoffs on Zoom's (ZM) company blog, and said that the realities of its business market made the job cuts unfortunately, but necessary.
"The uncertainty of the global economy, and its effect on our customers, means we need to a hard--yet important--look inward to reset ourselves," Yuan said. "As the CEO and founder of Zoom, I am accountable for these mistakes."
And to show how accountable he believes he is, Yuan said he would take a 98% pay cut, and forego any company bonus he would qualify for this year. Yuan added that members of Zoom's (ZM) executive team would take 20% pay cuts this year and also not receive any bonuses.
Zoom's (ZM) Thursday gains came on the heels of the stock dropping more than 6% on Wednesday. Altogether, Zoom's (ZM) shares have risen more than 17% this year, but are still down by almost 50% since reaching a 52-week-high of $152.69 on February 10, 2022.
In late January, in response to a slowdown in user growth, Zoom (ZM) said it would enact a 7% price increase for its popular Zoom One Pro plan.