news/GOOGL/2023.02.07/Zoom to shed about 1,300 jobs as pandemic-fueled demand slows.txt

Feb 7 (Reuters) - Zoom Video Communications Inc
said on Tuesday it would cut about 1,300 jobs, as demand for the
company's video conferencing services slows with the waning of
the pandemic, and take a related charge of up to $68 million.The company's shares, which fell 63% last year amid a rout
in technology shares, closed up 9.9% on the news but were down
marginally in extended trading.While announcing the layoffs, which will hit nearly 15% of
its workforce, Chief Executive Officer Eric Yuan said he would
take a pay cut of 98% for the coming fiscal year and forego his
bonus."We worked tirelessly... but we also made mistakes. We
didn't take as much time as we should have to thoroughly analyze
our teams or assess if we were growing sustainably, toward the
highest priorities," Yuan said.Zoom will incur about $50 million to $68 million in charges
related to the layoffs, according to a regulatory filing on
Tuesday. The company said a substantial part of it will be spent
in the first quarter of fiscal 2024.The company, which became a household name during
lockdowns due to the popularity of its video-conferencing tools,
has seen its revenue growth slow.Analysts are forecasting Zoom's revenue to have risen just
6.7% in fiscal 2022 after a more than four-fold jump in revenue
and a nine-fold surge in profit increase in 2021. Profit is
estimated to have fallen 38% in 2022."I would say incrementally, maybe this is telling us we
shouldn't expect reacceleration in the near-term on the revenue
side, but we could see additional upside to margins for a
company that is already profitable," RBC Capital Markets analyst
Rishi Jaluria said.Zoom had bumped up hiring during the pandemic to meet
surging demand, but now joins U.S. companies in reining in costs
to brace for a potential recession.A raft of U.S. companies from Goldman Sachs Group Inc
to Alphabet Inc have laid off thousands this
year to ride out a demand downturn wrought by high inflation and
rising interest rates.The video conferencing software maker also said that its
executive leadership team will reduce their base salary by 20%
in the same period.Departing employees will receive 16 weeks of salary,
healthcare coverage and a bonus for the year, Yuan said.
(Reporting by Akash Sriram and Samrhitha Arunasalam in
Bengaluru; Additional reporting by Chavi Mehta; Editing by
Shailesh Kuber and Anil D'Silva)