Salesforce, the business software giant, said on Wednesday that it planned to lay off 10 percent of its work force, or about 8,000 employees, and scale back office space because of concerns about the economy.
“The environment remains challenging, and our customers are taking a more measured approach to their purchasing decisions,” Marc Benioff, the company’s co-chief executive, said in a note to employees announcing the cuts.
Salesforce’s revenue, like that of many other technology companies, boomed during the pandemic when more people around the world worked from home and relied more heavily on technology to collaborate with colleagues remotely. In his letter, Mr. Benioff suggested that the company had hired too aggressively during that period.
Salesforce employed just under 80,000 people at the end of October, up from about 48,000 three years earlier.
“We hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Mr. Benioff said.
A Salesforce spokeswoman said the company had no further comment on the cuts.
The layoffs cast the tech industry’s slowdown into even sharper relief. In recent months, tech giants like Amazon have slowed down hiring and cut jobs, while smaller companies like Lyft and Stripe have also announced layoffs. Many of the industry’s largest firms have reported financial results suggesting they were feeling the effects of stubbornly high inflation and rising interest rates.
Social media companies have struggled with a pullback in digital advertising in particular. Meta, which owns Facebook and Instagram, cut 13 percent of its employees in November and said its head count would remain “roughly flat” through the end of this year. Snap, Snapchat’s parent company, laid off 20 percent of its employees in August, blaming challenging macroeconomic conditions. Elon Musk, who purchased Twitter for $44 billion in October, has slashed the company’s work force by more than half.
Salesforce’s sales grew 14 percent in its latest quarter, the slowest pace in years; it projected even slower growth in its current quarter. Other tech chiefs, like Meta’s Mark Zuckerberg, have recently admitted to hiring too many people as they rushed to make cuts. More than 150,000 tech workers were laid off last year, according to Layoffs.fyi, a site that tracks job cuts.
In November, Bret Taylor, Salesforce’s co-chief executive, announced that he would resign from his post and leave at the end of this month. In December, Stewart Butterfield, the chief executive of Slack, a workplace communication platform owned by Salesforce, also said he would leave his position by the end of this month. Salesforce bought Slack for $27.7 billion in 2020.
Salesforce is the largest private employer in San Francisco, and its flagship office building is the city’s tallest.
The company estimated that the changes would cost up to $2.1 billion. Salesforce is offering U.S. employees a minimum of five months of pay, as well as health insurance and career resources, Mr. Benioff said. Most of the cuts will be made “over the coming weeks,” he wrote.
Salesforce’s shares rose more than 3 percent in trading on Wednesday. The company’s stock price fell nearly 50 percent last year.
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By: Isabella Simonetti and Kalley Huang
Title: Salesforce to Lay Off 10% of Staff and Cut Office Space
Sourced From: www.nytimes.com/2023/01/04/technology/salesforce-layoffs.html
Published Date: Wed, 04 Jan 2023 21:08:41 +0000
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