Video conferencing company Zoom has abruptly terminated the employment of its president Greg Tomb only eight months after he was employed at the company.
According to a SEC filing, the former Google executive will receive severance benefits in line with his employment arrangements, which are payable upon a termination without cause. The move is effective today, Friday, March 3.
A Bloomberg report reveals that Tomb was on a $400,000 annual salary and had been granted $45 million in stock that would vest over four years. Tomb had taken a high-profile role at Zoom during his short tenure, appearing on earnings calls and overseeing the company’s sales operation.
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Before his sack, in an interview with Bloomberg during the January World Economic Forum in Davos, Switzerland, Tomb spoke optimistically about Zoom’s growth potential, while acknowledging that the company faced more competition, shortly after, the company announced the layoff of employees.
It is however unclear who would replace Tomb as president of Zoom, although, a spokesperson from Zoom disclosed that the company won’t find a replacement.
Zoom has “abruptly” fired its president, reported Bloomberg, with effect from Friday. According to a regulatory filing, former Google exec Greg Tomb, who only joined Zoom Video Communications in June, will receive severance benefits following his “termination without cause.” Tomb was on a $400,000 annual salary and had been granted $45 million in stock that would vest over four years, per Bloomberg. Earlier this week, the video-conferencing firm announced better-than-expected earnings, as well as a 27% year-over-year jump in large enterprise customers.
Zoom laid off about 1,300 employees as part of a 15% workforce reduction in February, while CEO Eric Yuan reduced his own salary by 98% for the fiscal year and is forgoing his 2023 bonus. (LinkedIn)
Tomb sudden sack was taken as a negative by some analysts at Wall Street. Analyst at Citigroup Inc. Tyler Radke wrote in a note to clients that it’s “hard to read this in a positive light,” as the sudden timing and limited language detailing the departure “gives investors plenty of leash to speculate on the reasons behind the departure.”
Shares of the video-conferencing software company fell as much as 2% in premarket, putting them on track to extend their decline this week to more than 6%. Tomb’s termination comes after Zoom announced last month that it was laying off about 1,300 employees, 15% of its workforce.
According to the company’s CEO Eric Yuan, via a blog post, he disclosed that the decision to trim the company’s workforce was necessitated, owing to the fact that the company hired too many staff during the peak of the covid-19 pandemic to support the quick rise of users on the platform.
Yuan acknowledged taking the blame for the company’s unfriendly condition and also disclosed that each organization across Zoom were impacted by layoffs, as a single departure was not taken lightly. By showing accountability not just in words but actions, further went on to slash his salary for the coming fiscal year by 98% also, forgoing his FY23 corporate bonus.
Also, members of his executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting the FY23 corporate bonuses.
Zoom’s revenue increased 4% year over year in the quarter, which ended on Jan. 31. It signified a dramatic slowdown from the quadrupling of revenue that Zoom enjoyed in 2020 and 2021 when consumers and businesses flocked to the video service during the Covid pandemic.
The company had its first net loss since 2018 in the quarter, losing $104 million compared with a net income of about $491 million in the year-ago period. The loss stems from stock-based compensation costs.