After axing 15 percent of its workforce, Zoom abruptly fires President Greg Tomb in a “termination without cause”
Zoom Video Communications has made a surprise and abrupt removal from its senior management team.
Last week it was reported shares in Zoom had slumped after abruptly terminating the employment of President Greg Tomb, a former Google and SAP executive, who had only started at the firm in June 2022.
Shares of the video-conferencing software company fell as much as 2 percent in premarket trading, and it comes after the firm had announced major job losses last month.
Termination without cause
Zoom’s unceremonious decision to part ways with Tomb, effective last Friday, was revealed in a regulatory filing on Friday.
The terse filing only stated the following.
“On February 28, 2023, Zoom Video Communications, Inc. (the “Company”) terminated the employment of Greg Tomb as the Company’s President, effective March 3, 2023.”
“Mr. Tomb will receive the severance benefits payable in accordance with his previously disclosed employment arrangements that are payable upon a ‘termination without cause.’”
The filing was signed off on by Aparna Bawa, Zoom’s chief operating officer.
It is reported that the firm is not seeking a replacement at this time.
Tomb’s employment with the San Jose, California-based company saw Tomb paid $400,000 per year, plus 8 percent annual bonus, with restricted stock options worth a total of $45 million over four years.
The firing comes as Zoom makes a major headcount reduction.
Zoom CEO and founder Eric Yuan announced on 7 February that the company would reduce its headcount by 15 percent, or about 1,300 employees.
In a blog post that Eric Yuan shared with Zoom’s staff (known as Zoomies), he blamed the cuts on the fact that the firm grew quickly during the Covid pandemic lockdowns, but the increase in staffing levels was not sustainable.
Yuan attributed the layoffs to “the uncertainty of the global economy and its effect on our customers” but also said the company “made mistakes” as it grew rapidly during the pandemic.
Yuan wrote demand for the company’s video conferencing services has slowed with the waning of the pandemic, the firm is taking a related charge of up to $68 million.
Eric Yuan said at the time that he was accountable for these mistakes and the actions the firm took, and therefore he would cut his salary by 98 percent in 2023 and forgo his corporate bonus.
In addition, other members of the executive leadership team will also reduce their salaries by 20 percent this year and also forgo corporate bonuses.