Salesforce has become the latest major technology company to reduce its workforce after announcing that it would lay off one in ten employees and close some offices.
The American cloud-based software group, which had some 73,500 employees this time last year, said it had too many staff in the midst of an economic slowdown. Shares in the business closed up $4.81, or 3.6 per cent, at $139.59 in New York last night following the announcement.
The move follows in the footsteps of Meta Platforms, Amazon and Uber, which each cut thousands of jobs last year as a global rout took hold across the tech industry. Last night Vimeo, the video hosting platform, was reported to be planning to cut 11 per cent of its workforce due to the “uncertain economic environment”, according to TechCrunch, the US online high tech newspaper.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Marc Benioff, co-founder, chairman and co-chief executive of the group wrote in an email to employees. “With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 per cent, mostly over the coming weeks.
“I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic we hired too many people, leading into this economic downturn we’re now facing. I take responsibility for that,” Benioff wrote.
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Alongside the lay-offs, Salesforce is planning “select real estate exits and office space reductions within certain markets,” according to a stock market disclosure. The company did not immediately respond to an inquiry as to which offices would be shut or scaled back.
The redundancies come amid upheaval at the business, which recently announced that Bret Taylor, co-chief executive, and Stewart Butterfield, the boss of Slack, which it acquired for $27.7 billion in 2021, would depart. The decisions were said to be unrelated.
Benioff, 58, said laid-off workers would be offered a “generous” departure package, including some five months’ pay.
“The employees being affected aren’t just colleagues,” he wrote. “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.”
