Zoom Video Communications, a communications company from the US, has announced that it will cut 15% of its staff through layoffs, which equals 1,300 employees. With this, Zoom joined the list of technology companies that have chosen the path of layoffs to battle inflation and declined sales. Because of the global economic slowdown, people have lowered their spending on technology-focused products, which many leading technology companies have reflected in their financial reports. Many companies lowered their spending on marketing and advertising to reduce their spending in early 2022. But with time, the situation worsened, forcing companies to put their employees out of work.
Zoom caught the communications market by storm at the start of the pandemic in 2020. Many countries opted for nationwide lockdowns, urging people to stay at home to avoid the spread of COVID-19. It disrupted the conventional flow of work for many companies across the world. To manage the continuous workflow, companies soon adopted remote working facilities. But as every company decision was being taken over the internet, the question of data security arose. It is where Zoom played a significant role as it was one of the few video conferencing platforms that came with security protocols and private meetings in 2020, which was unique to many people using advanced technologies for the first time.
Along with this, Zoom was also extremely easy to use which cleared the generation gap between elderly people and new technology. Zoom garnered an extreme amount of attention throughout the pandemic. So much so that the phrase, “Let’s talk on a Zoom call” became an everyday scenario. Educational institutions, private companies, public companies, and even governments started using Zoom for holding private meetings on Zoom. But as soon as the world came out of the pandemic, war broke out between Russia and Ukraine. Although this was just a private war between two countries, Russia’s involvement in the war was bound to hurt the western world. It brought a serious energy and economic crisis to European countries. The effects of this economic fall can also be observed in the US. The US is battling one of the worst inflations in history.
Because of this economic fall across the globe, tech companies reported a critical drop in their revenue throughout 2022. Zoom, along with the economic slowdown, also suffered from the reopening of offices. One of the primary reasons for Zoom’s global success was remote working conditions, which many believed would be the new normal. But with the start of 2022, many research studies highlighted the impact of the work-from-home working model on employees’ mental health. Thus, this model was soon scrapped by over 80% of companies, causing the revenue of Zoom to fall significantly. Its competitors like Google and Microsoft improved their services more to compete with Zoom, thus creating another challenge for the company to overcome. Google has a significant edge over its competitors because of its widespread services such as Gmail, Google Chrome, Google Workspace, etc. Because of this, many companies seeking to go digital, choose Google services.