Zoom announce new layoffs

Wednesday, 08 February 2023

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Good morning!

There is new money on the continent. Partech, a global VC firm has reached its first close of Partech Africa II at €245 million (~$263 million), making it the largest Africa-focused fund yet.

This means that at a time of need, startups might have an incline of where to look for more runway. But the funds will only be for companies that show great potential. Especially as the industry is wrecked from top to bottom, it's uplifting to see that new money still finds its way from investors that believe there is a coin to be made on the continent.

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Below are the tech stories and news you need to know to start your day, carefully curated by Technext.

Summary of the news

2,900 crypto jobs were lost in January
Partech has closed a €245 million Africa-focused fund
A Kenya court said Facebook's parent, Meta can be sued by an ex-moderator
Zoom has let go of 15% of its workforce

2,900 crypto jobs lost in January

Although there was a market rally and a fresh sense of normalcy in the crypto space in the first month of this year, staff layoffs continue to plague the industry. According to a report by Cointelegraph, at least 2,900 crypto staff were laid off across 14 crypto firms in January 2023.

Notably, this cutting of workforce trend is majorly a result of the crypto winter caused by the FTX and Terra implosions of 2022. It is also a general reflection of the tech industry, which has endured a difficult period due to the economic downturn in the last 12 months or thereabouts, Technext reports.

However, it is surprising that despite the recent relief rallies, with major cryptocurrency gains in the new year, crypto firms continue to lay off workers. It remains to be seen whether the waters will be calm or the layoffs will continue to give the crypto industry a hard time.

Partech closes Africa-focused fund at €245 million

Partech, a global VC firm with several funds and support for tech and digital companies, has reached its first close of Partech Africa II at €245 million (~$263 million), making it the largest Africa-focused fund yet.

The firm, which focuses on early- and growth-stage startups across the continent, intended to raise about €230 million (~$250 million) for its second African fund and reach a first close at €150 million, according to general partners Tidjane Deme and Cyril Collon.

The company, however, closed above the stated target for the entire fund at first close due to the overwhelming interest from LPs. Additionally, according to one of its partners, Deme, the African fund would now aim to reach a final closing of no more than €280 million (about $300 million), Technext reports.

"Last year, we went out to raise fund two, and we did it in a very different market. Everything has changed; the deal flow in Africa, especially for Series A and B, has been multiplied by 14 over the last five years,” Tidjane Deme from the firm’s Dakar office said.

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Meta can be sued in Kenya by Sema's ex-contractor

A labour court in Kenya ruled on Monday that Meta, the parent company of Facebook, can be sued in the East African country after a former content moderator filed a lawsuit against it alleging poor working conditions, Reuters reports.

The lawsuit was filed by one person on behalf of a group and was also filed against Meta's local outsourcing company Sama. It seeks financial compensation, an order that outsourced moderators have the same healthcare and pay scale as Meta employees, that unionisation rights be protected and an independent human rights audit of the office.

The decision from Kenya's employment and labour relations court could have implications for how Meta works with content moderators globally. The U.S. company works with thousands of moderators around the world, tasked with reviewing graphic content posted on its platform.

Meta had argued that the Kenyan court had no jurisdiction because the company is not based in the African country, and thus should be struck from the case.

Zoom layoffs impact 15% of staff

After an unfathomable boom at the onset of the pandemic, Zoom has made the decision to cut 15% of its staff, or 1,300 people, TechCrunch reports.

“The uncertainty of the global economy, and its effect on our customers, means we need to take a hard – yet important – look inward to reset ourselves so we can weather the economic environment,” CEO Eric Yuan wrote in a blog post addressed to “Zoomies.”

In the first 24 months of the pandemic, Zoom grew its staff three-times over to manage a sudden increase in demand, when the company experienced five straight quarters of triple-digit year-over-year growth. That growth naturally slowed down, but Zoom has remained on a steady upward trajectory.

When the twelve-year-old company last reported quarterly earnings in November, revenue had increased 5% year-over-year to $1.1 billion; though online revenue dropped 9%, enterprise revenue increased by 20% to $614.3 million. Zoom also reported $272.6 million in free cash flow.

“As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today — and I want to show accountability not just in words but in my own actions,” Yuan wrote. He will cut his salary by 98% and decline his bonus; he said that executive leadership will reduce their pay by 20% and also forfeit their bonuses.