Greg Tomb, The President Of Zoom, Has Been Abruptly Fired 'without Cause'

Greg Tomb, the president of Zoom Video Communications Inc. and a former Google executive who had only joined the company in June, had his employment abruptly terminated, which caused a decline in the stock price in early trading on Friday.

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Premarket losses in the company's shares of video conferencing software put them on course to increase this week's slump to over 6%. According to agreements that are payable upon a "termination without cause," Tomb will earn severance benefits, the business stated in a regulatory statement. It takes effect on Friday.

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During his brief employment at Zoom, Tomb had assumed a prominent position, participating on earnings calls and managing the sales department. He answered directly to Zoom's CEO Eric Yuan, who founded the company in 2011 and had to quickly expand it during a pandemic-driven boom. The corporation has begun laying off employees more recently to deal with waning demand.

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A Zoom representative declined to speak further and stated that the firm is not currently seeking for a replacement. Zoom is situated in San Jose, California.

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Several on Wall Street saw the abrupt change negatively. It's "hard to take this in a good light," Citigroup Inc. analyst Tyler Radke wrote in a note to clients, as the abrupt timing and sparse wording describing the leaving "gives investors plenty of leeway to speculate on the reasons behind the leave."

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The resignation, according to Sterling Auty, an analyst at MoffettNathanson, happened just days after Zoom's most recent quarterly results, which exceeded expectations in terms of earnings but revealed the company is still struggling with slower sales growth.

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A change is being made in the CEO who was hired for sales leadership, and Zoom's outlook suggested "a larger deceleration than the Street had forecast," Auty said. He continued by saying that changes in sales leadership positions often take several quarters to complete.

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According to a June filing, Tomb's job included a $45 million stock award that would vest over four years, along with a $400,000 base pay and an 8% bonus objective.

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During a January World Economic Forum interview in Davos, Switzerland, Tomb was upbeat about Zoom's potential for development while noting that the firm faced more competition. A few weeks later, Zoom made the announcement that it will reduce its employment by 15%.