Zoom to Lay Off 15% of Its Workforce

What happened

Zoom announced Tuesday it plans to lay off about 1,300 employees, representing close to 15% of its total workforce, CNN reported. It's just one of several big tech companies to announce a large reduction in headcount since the start of the year.

So what

In a memo to employees, Zoom CEO Eric Yuan confirmed that layoffs would impact every area within the company.

“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.”

Over the past six weeks, a number of major tech companies have announced layoffs. That may seem concerning, but this trend seems to be limited to the tech sector.

During the pandemic, tech companies saw a huge uptick in demand for their services -- Zoom was especially poised to capitalize on the remote work wave. But now that society is settling back into pre-pandemic routines, the tech bubble seems to be bursting. Many tech companies are trying to cut costs by slashing their headcount after going on hiring sprees in 2020 and 2021.

The good news, though, is that the U.S. labor market is in great shape despite this recent string of tech layoffs. In January, the economy added 517,000 jobs, and the national unemployment rate hit a 54-year low of 3.4%.

Now what

Workers both inside and outside the tech field can, and should, do their part to gear up for added layoffs -- if not in the near term, then eventually. Having a solid emergency fund could make a period of unemployment much easier to cope with, so workers should aim to sock away enough money in savings to cover at least three full months of essential bills.

Boosting job skills is something tech workers in particular should also focus on right now. Those who make themselves indispensable may have a greater chance of surviving the next round of layoffs that comes down the pike.