January 29, 2023

Business software giant Salesforce said on Wednesday it plans to cut 10% of its workforce, or about 8,000 employees, and reduce office space due to concerns about the economy.

“The environment remains challenging and our customers are taking a more measured approach to purchasing decisions,” said Marc Benioff, the company’s co-chief executive officer. In a note to employees it says announced layoffs.

Like many other tech companies, Salesforce’s revenue has boomed during the pandemic, when more people around the world are working from home and relying more on technology to collaborate with colleagues remotely. In his letter, Mr. Benioff suggested that the company was hiring too aggressively during that time.

Salesforce had nearly 80,000 employees at the end of October, up from about 48,000 three years ago.

“We hired too many people and it caused the recession we’re facing now, and I take responsibility for that,” Mr Benioff said.

A Salesforce spokeswoman said the company had no further comment on the layoffs.

The layoffs have made the tech industry’s slowdown all the more apparent. Tech giants such as Amazon have slowed down their hiring and layoffs in recent months, while smaller companies such as Lyft and Stripe have also announced layoffs. Financial results released by many of the industry’s largest companies suggest they are feeling the effects of persistently high inflation and rising interest rates.

Social media companies have been grappling with a pullback in digital advertising. Meta, which owns Facebook and Instagram, cut 13% of its workforce in November and said its headcount would be “roughly flat” by the end of the year. Snapchat’s parent company, Snap, laid off 20% of its workforce in August amid a challenging macroeconomic environment. Elon Musk, who bought Twitter for $44 billion last October, has laid off more than half of the company’s workforce.

Salesforce’s sales rose 14% in the most recent quarter, the slowest pace in years; it expects growth to be even slower this quarter. Other tech chiefs, like Meta’s Mark Zuckerberg, recently admitted hiring too many people in the rush to lay off workers. According to Layoffs.fyi, a website that tracks layoffs, more than 150,000 tech workers were laid off last year.

Salesforce’s layoffs follow the departure of some of its top executives. In November, company co-CEO Brett Taylor announced he would step down and leave the company at the end of the month. In December, Stewart Butterfield, chief executive of Slack, the workplace communication platform owned by Salesforce, also said he would leave at the end of this month. Salesforce acquired Slack in 2020 for $27.7 billion.

Salesforce is the largest private employer in San Francisco, and its flagship office building is the tallest in the city.

The changes will cost as much as $2.1 billion, the company estimates. Benioff said Salesforce provides U.S. employees with at least five months’ pay, as well as health insurance and career resources. Most of the cuts will be made “in the coming weeks,” he wrote.

Shares of Salesforce rose more than 4% in premarket trading on Wednesday. The company’s shares have fallen nearly 50% in the last year.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *