Following a period of rapid pandemic hiring that left it with an overburdened workforce in the midst of an economic slowdown, Salesforce is laying off about 10% of its workforce, or more than 7,350 employees, and closing some offices.
Salesforce stated in a filing with the US Securities and Exchange Commission (SEC) that the restructuring plan will reduce operating costs, improve margins, and increase profitability. The job cuts in the tech industry would result in charges ranging from $1.4 billion to $2.1 billion, with only $800 million to $1 billion recorded in the fourth quarter.
Salesforce co-CEO Marc Benioff explained the layoffs in a letter to employees, citing the complex and difficult environment and client belt-tightening, and saying the company had hired too many people when growth accelerated during Covid-19.
Salesforce did not notify employees of the job cuts, but stated that layoff decisions would be subject to local laws, consultation requirements in certain countries, and the company’s business needs.
The number of layoffs is said to be the highest in the company’s 23-year history. Employees who lose their jobs will receive nearly five months of pay, health insurance, career resources, and other benefits, according to the company. “Those outside the U.S. will receive a similar level of support, and our local processes will align with employment laws in each country,” Benioff added.
The sources for this piece include an article in Reuters.