Software giant Salesforce said Wednesday that it would cut 10% of its workforce, the latest major tech layoff announcement.
Salesforce is struggling with the same issues facing many tech firms — profits and revenues are falling, expenses and economic uncertainty are rising after companies beefed-up staff during the pandemic.
In a letter to employees announcing the job cuts, Marc Benioff, Salesforce’s chair and co-CEO cited a change in consumer behavior as a contributing reason to the decision.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” said Benioff. “With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks,” he continued.
“I’ve been thinking a lot about how we came to this moment,” Benioff wrote. “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”
Salesforce employed just under 80,000 people at the end of October, up from about 48,000 three years earlier. As of January 2022, Salesforce reported 73,541 employees worldwide.
Salesforce will be slashing roughly 8,000 jobs, the latest tech giant to under lay offs. Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, laid off 11,000 employees in November and Amazon plans to let go of over 10,000 employees this year.
According to MarketWatch, the number of tech layoffs in 2022 approached the same number let go during the “Great Recession” of 2008 and 2009. More than 60,000 people in the tech industry lost their jobs in 2022 compared to the 65,000 jobs cut annually during the recession.
Salesforce’s sales grew by 14 percent in its latest quarter, the slowest pace in years. It projected even slower growth for the current quarter.
Salesforce is losing two top executives, too. The company announced recently co-CEO and Vice Chair Bret Taylor will step down from those roles at the end of January. Salesforce acquired Slack, a leading workplace communication platform, for $27.7 billion in 2020, In December, Slack CEO Stewart Butterfield said he would depart from his position at the end of January.
Salesforce is offering U.S. employees a minimum of five months of pay, as well as health insurance and career resources, Benioff said, adding that international workers would receive a “similar level of support.”
“The employees being affected aren’t just colleagues,” Benioff wrote in his letter to employees. “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.”
Shares of Salesforce rose more than 3% Wednesday. The company’s stock price fell by nearly 50 percent last year.