Salesforce said Wednesday that it will cut approximately 10% of its workforce and reduce its real estate footprint.
The San Francisco-based cloud computing software company will also be closing some offices, according to a regulatory filing Wednesday, according to The Hill.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” said CEO Marc Benioff in a letter to employees. “With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10%, mostly over the coming weeks.”
Founded in 1999, 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, reports the New York Times.
The company employed just under 80,000 people at the end of October, up from about 48,000 people three years earlier. Mr. Benioff suggested that the company had hired too aggressively during that period of growth.
“We hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Mr. Benioff said.
Besides the post-pandemic return of workers back to offices, the tech industry has been pummeled by a seemingly perfect storm of economic factors over the past year, including rising interest rates, looming recession fears, and consumers and businesses rethinking expenses.
CNN is reporting that like Benioff, a number of other tech founders and CEOs have since admitted they failed to accurately gauge pandemic demand. As a result, tech firms including Amazon and Meta have announced company-wide layoffs.
Dan Ives, an analyst at Wedbush Securities, wrote in an investor note Wednesday that the cloud-computing giant “clearly is seeing headwinds in the field and thus is trying to quickly adjust to a softening demand environment.” The analyst added that the company “clearly overbuilt out its organization over the past few years along with the rest of the tech sector.”
In his letter Wednesday, Benioff said impacted employees in the United States will “receive a minimum of nearly five months of pay, health insurance, career resources, and other benefits to help with their transition.” Those outside the United States “will receive a similar level of support,” Benioff wrote.
“The employees being affected aren’t just colleagues,” Benioff said. “They’re friends. They’re family. Please reach out to them. Offer the compassion and love they and their families deserve and need now more than ever. And most of all, please lean on your leadership, including me, as we work through this difficult time together.”
