SAN FRANCISCO– Salesforce announced Wednesday that it will be shedding about 10% of its workforce and reducing its real estate footprint. It’s the latest tech company to cut spending as general economic uncertainty continues to hit Silicon Valley particularly hard.
In a letter to employees announcing the job cuts, Salesforce chairman and co-CEO Marc Benioff admitted that headcount had increased too much at the start of the pandemic and said most of the job cuts will be in the coming ones weeks would take place.
“I’ve thought a lot about how we got to this moment,” Benioff wrote. “As our revenue accelerated from the pandemic, we hired too many people, leading to this economic downturn that we are now facing, and I take responsibility for that.”
As of January 2022, Salesforce reported 73,541 employees worldwide.
The tech sector, initially boosted by a sudden and intense pandemic-driven shift to online services, has since had to deal with consumers returning to their offline lives. At the same time, the industry has been hit by a seemingly perfect storm of economic factors over the past year, including rising interest rates, looming recession fears and consumers and businesses reconsidering spending.
Like Benioff, a number of other tech founders and CEOs have since admitted they couldn’t accurately gauge pandemic demand. As a result, tech companies like Amazon and Meta have announced company-wide layoffs.
Dan Ives, analyst at Wedbush Securities, wrote in an investor note on Wednesday that the cloud computing giant “clearly sees headwinds in this space and is therefore looking to adapt quickly to a slowing demand environment.” The analyst added that the company “has clearly overbuilt its organization along with the rest of the tech sector in recent years.”
Salesforce shares are up more than 3% in early trading Wednesday following the announcement.
Like other tech companies, Salesforce’s stock has suffered sharp losses over the past year. With that in mind, Salesforce made a significant change in its C-suite: co-CEO and vice chairman Bret Taylor said he would be stepping down from his roles at the company at the end of January.
In his Wednesday letter, Benioff said affected employees in the United States would “receive at least nearly five months’ wages, health insurance, career resources and other benefits to help with their transition.” Those outside of the United States “will receive a similar level of support,” Benioff wrote.
“The affected employees are not just colleagues,” said Benioff. “They are friends. you are family Please contact her. Offer the compassion and love they and their families deserve and need now more than ever. And most importantly, please rely on your guidance, including me, as we get through this difficult time together.”
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https://abc7.com/salesforce-job-cuts-layoffs-employee-headcount-count/12651464/ Salesforce is laying off about 10% of its workforce and reducing its real estate footprint in the latest round of tech job cuts