Salesforce Cutting Thousands of Workers

Salesforce is laying off about 10% of its workforce, or nearly 8,000 employees, in the latest round of job cuts in the tech industry as corporations cut back on software and other spending. The San Francisco cloud computing software company will also be closing some offices, according to a regulatory filing Wednesday. "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, per the AP. "With this in mind, we've made the very difficult decision to reduce our workforce by about 10%, mostly over the coming weeks."

Benioff, who co-founded Salesforce in 1999, recently became the sole CEO after Bret Taylor resigned as co-CEO and vice chairman in November. Benioff said employees being released will receive nearly five months of pay, health insurance, career resources, and other benefits. "This is a smart poker move by Benioff to preserve margins in an uncertain backdrop as the company clearly overbuilt out its organization over the past few years along with the rest of the tech sector with a slowdown now on the horizon," Wedbush analyst Dan Ives wrote in a client note.

The New York Times reports the company had nearly 80,000 employees as of Oct. 31; three years prior, the number was 48,000. "We hired too many people leading into this economic downturn we're now facing, and I take responsibility for that," Benioff said. Tech companies hired aggressively during the pandemic to keep up with soaring demand, but Salesforce had been growing rapidly since at least 2018, per the AP, with its workforce more than doubling between then and 2021.

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Sales the company's latest quarter grew at the slowest rate in years at 14%, and the current quarter is expected to decline from there. The company anticipates $1.4 billion to $2.1 billion in charges related to its plan. That includes $1 billion to $1.4 billion in charges tied to employee transition, severance payments, employee benefits, and stock-based compensation. There will be $450 million to $650 million in charges for office closings. The stock, which was down nearly 50% last year, is trading up about 3% as of this writing. (More Salesforce.com stories.)