The layoffs continue worked on technology, and this week, came one of the biggest winners of the pandemic: Zoom.
Yesterday, the video conferencing platform cut 15 percent of its workforce, or about 1,300 people. This happened after Zoom tripled in two years. “We haven’t taken as much time as we should have to properly analyze our teams or see if we’re growing well, which is really important,” Eric Yuan, CEO of Zoom, said in announcing the layoffs. Yuan said he “answered for these mistakes,” and vowed to cut his salary by 98 percent and waive his 2023 bonus, dropping his compensation by about $10,000, according to a filing by the US Securities and Exchange Commission.
Zoom is not alone. Big Tech companies grew when the Covid-19 pandemic shut down the world and pushed people to increase their screen time. Amazon added more than 400,000 employees in 2020, and Meta, then Facebook, hired 13,000. Zoom went from an unknown video platform to a household name. There were happy hours for Zoom, weddings, and anniversary. As of late April 2020, the company said 300 million daily participants were on Zoom calls. It was the most downloaded app on Apple devices in 2020 and reported $2.6 billion in revenue for the year ending in January 2021, a 326 percent increase from last year.
Nearly three years later, Zoom’s dominance is waning. Competitors, notably Microsoft and Slack, bundle calls with email and other productivity tools. Zoom is experiencing a surge in the market and falling into the Peloton problem, for example, most of the people who are ready to buy Zoom packages probably did. “Suddenly it has become a more difficult market than it was [Zoom] who they’ve met in the past,” says Will McKeon-White, an infrastructure and operations analyst at research firm Forrester.
And as companies look to cut costs in the face of market uncertainty, Zoom may be left in place of the likes of Google Meet, Microsoft Teams, and Slack. But for now, Zoom is still growing. Its latest economic report shows growth of about 5 percent per year, but this is a significant drop from the 2021 economic growth of 55 percent per year. With few people approaching to enjoy, it has become more of a business. And Microsoft Teams, Zoom’s arch-rival, has quietly grown by leaps and bounds 270 million monthly users by early 2022.
Zoom seems to know it needs to be more than just video calling. In late 2022, it announced plans to integrate email and calendar into the platform, and release an AI-powered chatbot to solve customer problems. It’s also added recording avatars and meeting templates, and a new feature called Zoom Spots, a video collaboration that feels like an endless Zoom call, will launch later this year.
Zoom was a huge success because it was easy to use. It was also free if people kept their phones under 40 minutes. Up to 100 people could join at once. But other video calling services, such as Google Meet and Skype, also offer free calls that last longer. And the similarity to the video call was not encouraging. People have reported “Zoom fatigue” which is caused by the strange, psychological effects of video communication and staring at their faces for hours a day.