The software maker, whose sales and customer service tools have made it one of the most popular cloud computing companies, has more than 79,000 employees, which means the layoffs could affect nearly 8,000 people. In addition to Benioff’s email, the company disclosed the layoff plans in an organizational filing.
Salesforce, which owns the popular workplace chat tool Slack and counts Ford, GE Appliances and Humana among its clients, is the latest in a growing list of big tech companies that have cut their workforces as a massive pandemic. The sales boom is waning and a potential recession is looming.
The parent is on Facebook Meta announced that it would lay off 11,000 people Last fall, Amazon is working on Cut about 10,000 people. Other big tech companies have frozen hiring — all a dramatic turnaround from the past decade of explosive growth in Silicon Valley.
Salesforce said it will also reduce its office space as part of its cost-cutting plan, including “exiting select properties.” The company is headquartered in the tallest building in San Francisco, called the Salesforce Tower. He didn’t specify if the tower would be affected by the lowering plans, and representatives declined to provide more details beyond what was indicated in Benioff’s filing and email.
Salesforce, like many of its fellow tech giants, has dealt with slowing sales growth. The other co-CEO, Brett Taylor, Recently announced He will leave the company at the end of this month. He also served as chairman of Twitter for most of this year, before Elon Musk bought the company and the board of directors was dissolved.
Salesforce’s revenue growth rate slowed to 14 percent last quarter. The company’s stock is down about 50 percent last year, as technology stocks suffered a dismal year amid slowing growth and economic uncertainty.
Shareholders rewarded Salesforce’s cost-cutting plan on Wednesday, and the stock rose more than 2 percent.
“This is a smart poker move by Benioff to keep profit margins on an uncertain backdrop, as the company has clearly overbuilt its foundation over the past few years along with the rest of the tech sector with a slowdown now looming,” the analysts said. Wedbush Securities Dan Ives and John Katsingris wrote in a note Wednesday morning.
Salesforce said some of the laid-off employees will get an email Wednesday morning and will be in touch with the company’s leadership. In his email, Benioff wrote that employees in the US will receive approximately five months of severance pay and benefits.
Despite big tech stumbles and global economic uncertainty, job opportunities in the United States have remained fairly steady. The Bureau of Labor Statistics reported at the end of November that the number of job openings was “little changed” at 10.5 million.
But newly laid-off workers may face stiff competition with other technical professionals for the best positions.
Twitter cut about half of its workforce when Musk took over. In addition to cuts from Meta, Amazon, Lyft, Netflix, Shopify, and many more, tens of thousands of tech workers have been left looking for jobs in the past year, in a market that was once a sure bet for employment.