Signage on a Saleforce office building in San Francisco, California, U.S., on Tuesday, Feb. 23, 2021.
David Paul Morris | Bloomberg | Getty Images
Salesforce is cutting 10% of its workforce and reducing some office spaces as part of a restructuring plan, the company announced Wednesday. The company reported more than 73,000 workers as of Jan. 31, 2022.
In a letter to employees, co-CEO Marc Benioff said customers have been more “measured” in their purchasing decisions given the challenging macroeconomic environment, which led Salesforce to make the “very difficult decision” to lay off workers.
“I’ve been thinking a lot about how we came to this moment,” he said. “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.”
Shares of Salesforce were up nearly 3% Wednesday.
The cuts mark the latest round of departures at the cloud-based software company, which is the largest private employer in San Francisco and already let go hundreds of employees in November. Later that month, Bret Taylor announced his plan step down as co-CEO on Jan. 31, leaving Marc Benioff alone again at the top of the company he co-founded in 1999.
In the three trading days after the Taylor news landed alongside Salesforce’s third-quarter earnings report, the stock had two of its three worst days of 2022, plunging 8.3% and 7.4%, respectively.
Days later, the company announced the departure of Slack CEO Stewart Butterfield, who joined Salesforce as part of its biggest acquisition ever.
Salesforce hired aggressively during the pandemic. At the end of January 2022, it employed 73,541 people and said in a December filing that headcount had risen 32% since Oct. 2021 “to meet the higher demand for services from our customers.”
Now, like many other major tech companies, Salesforce is looking to cut costs as it contends with slowing revenue growth and a weakening economy. Days after Twitter’s new boss Elon Musk slashed half his company’s workforce, Facebook parent Meta announced its most significant round of layoffs ever, eliminating 13% of its staff. Amazon, Lyft, HP and DoorDash also announced significant cuts to their workforces.
Salesforce said it expects its employee restructuring to be complete by the end of fiscal 2024, and its real estate restructuring to be complete by fiscal 2026.
–CNBC’s Jordan Novet contributed to this report
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