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Zoom cuts 150 jobs amid market and regulatory pressure increasing competition

Zoom, the video conferencing giant that soared in popularity during the COVID-19 pandemic, has announced that it is laying off 150 employees, or about 2% of its workforce, as part of its cost-cutting measures. The company said that the layoffs are not company-wide and that it will continue to hire for roles in artificial intelligence, sales, product, and operations in 2024.

Zoom confirmed the news on Thursday after Bloomberg reported that the company had sent show-cause notices to some of its employees, asking them to explain why they should not be terminated. Zoom said that it regularly evaluates its teams to ensure alignment with its strategy and that it is rescoping some roles to add capabilities for the future.

The layoffs come as Zoom faces increasing competition and regulatory challenges in the video conferencing market, which has seen a surge in demand and innovation amid the pandemic. Zoom's rivals, such as Microsoft Teams, Google Meet, and Cisco Webex, have been adding new features and integrations to attract and retain customers. Zoom has also been expanding its offerings, such as launching Zoom Phone, Zoom Events, and Zoom Apps, to diversify its revenue streams and increase its user engagement.

However, Zoom has also been facing scrutiny from regulators and lawmakers in various countries, such as the US, the UK, Germany, India, and China, over its privacy, security, and data protection practices. Zoom has been accused of sharing user data with third parties, such as Facebook and LinkedIn, without proper consent, and of allowing unauthorized access to its meetings by hackers and foreign governments. Zoom has also been criticized for its lack of transparency and accountability and for its ties with China, where it has servers and employees.

Zoom has been trying to address these issues by improving its encryption, authentication, and moderation features, and by hiring experts and advisors to enhance its compliance and governance. Zoom has also been cooperating with the authorities and conducting audits and reviews to ensure its adherence to the laws and regulations in different jurisdictions.

Zoom's stock price has been reflecting its mixed fortunes, as it has fallen by about 10% since the beginning of the year, and by about 90% since its peak in October 2020. Zoom's market capitalization is currently around US$100 billion, down from US$200 billion at its height. Zoom's revenue growth has also slowed down, as it reported a 35% year-over-year increase in the third quarter of 2024, compared to a 191% increase in the same period of 2023.

Zoom's CEO, Eric Yuan, has acknowledged the challenges and opportunities that the company faces in the post-pandemic era and has expressed his confidence and optimism in the future of Zoom. He said that Zoom's mission is to deliver happiness and empower people to accomplish more and that the company is committed to innovation and excellence. He also said that Zoom is grateful for its customers, partners, and employees and that the company will continue to support them and serve them with passion and care.

Zoom layoffs are a sign of the changing dynamics and realities of the video conferencing industry, which has been transformed by the pandemic and its aftermath. Zoom will have to adapt and evolve to maintain its leadership and relevance in the market, and to overcome the challenges and risks that it faces. Zoom will also have to balance its growth and profitability goals with its social and ethical responsibilities, and to ensure that it delivers value and satisfaction to its stakeholders.