Layoffs proceed to hit the tech industry, and this week, they got here for one of many pandemic’s largest winners: Zoom.  

Yesterday, the video conferencing platform lower 15 p.c of its employees, or about 1,300 folks. That got here after Zoom tripled its headcount in two years. “We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities,” Eric Yuan, Zoom’s CEO, stated in a statement asserting the layoffs. Yuan stated he was “accountable for these mistakes,” and vowed to cut back his wage by 98 p.c and forgo a 2023 bonus, dropping his compensation to about $10,000, in line with a US Securities and Exchange Commission filing. 

Zoom isn’t alone. Big Tech firms boomed when the Covid-19 pandemic shuttered the world and pushed folks to extend their display time. Amazon added greater than 400,000 employees in 2020, and Meta, then Facebook, hired 13,000. Zoom rose from an obscure video conferencing platform to a family title. There have been Zoom glad hours, weddings, and memorial providers. By late April 2020, the corporate stated 300 million daily participants have been on Zoom calls. It was the most downloaded app on Apple units in 2020 and reported $2.6 billion in income for the fiscal yr ending in January 2021, a 326 p.c improve from the prior yr.

Nearly three years later, Zoom’s dominance is waning. Competitors, significantly Microsoft and Slack, bundle calling with electronic mail and different productiveness instruments. Zoom is experiencing market saturation and falling to the Peloton problem—specifically, most people who’re keen to purchase Zoom packages could have achieved so. “It’s suddenly become a much, much harder market than what [Zoom] previously experienced,” says Will McKeon-White, an infrastructure and operations analyst at analysis agency Forrester.

And as firms look to chop prices within the face of market uncertainty, Zoom may very well be left behind in favor of rival bundled providers resembling Google Meet, Microsoft Teams, and Slack. But for now, Zoom remains to be rising. Its latest financial report reveals development at round 5 p.c yr over yr, however that’s a pointy slowdown from its 2021 revenue growth of 55 p.c yr over yr. With much less folks Zooming for enjoyable, it’s grow to be extra about enterprise. And Microsoft Teams, Zoom’s predominant rival, has grown extra quietly, passing 270 million month-to-month customers by early 2022.

Zoom is seemingly conscious that it must be greater than only a video name service. In late 2022, it announced plans to combine electronic mail and calendar options into the platform, and to roll out an AI-driven chatbot to troubleshoot buyer points. It’s added cartoon avatars and assembly templates, and a brand new characteristic known as Zoom Spots, a video coworking expertise that sounds loads like a endless Zoom name, will launch later this yr.

Zoom excelled as a result of it was straightforward to make use of. It was additionally free if folks saved their calls shorter than 40 minutes. Up to 100 folks can be a part of at a time. But other video calling services, like Google Meet and Skype, additionally supply free calls that last more. And changing into synonymous with video calling wasn’t all constructive. People reported “Zoom fatigue” introduced on by the unusual, psychological results of speaking over video and watching their very own faces for hours a day.