Salesforce Axes 10% of Workforce Amid Economic Slowdown
Salesforce lays off roughly 10% of its staff and closes some offices as customers curb spending. CEO Marc Benioff admits the company hired too aggressively during the pandemic boom.
Salesforce announces a plan to lay off about 10% of its workforce and close some offices as it navigates a challenging economic environment. Co-CEO Marc Benioff shares a letter to employees acknowledging that the company hired too many people during the pandemic revenue surge, and he takes full responsibility for the overstaffing.
The cloud software giant expects the restructuring to result in $1.4 billion to $2.1 billion in charges, with $800 million to $1 billion recorded in the fourth quarter of fiscal 2023. This move reflects a broader trend across the tech industry, as companies like Meta and Amazon also cut costs to prepare for a potential downturn driven by aggressive interest rate hikes.
Customers are taking a more measured approach to purchasing decisions, leading to Salesforce posting its weakest revenue increase in the quarter ended October 31. Affected U.S. employees receive a minimum of about five months of pay along with health insurance, while international workers get a similar level of support, bringing the company's headcount down from its previous total of over 73,000 employees.