The software maker, whose tools for sales and customer service have made it one of the most high-profile cloud-computing companies, has more than 79,000 employees, meaning the layoffs could affect nearly 8,000 people. In addition to Benioff’s email, the company revealed the layoff plans in a regulatory filing.
Salesforce, which owns the popular workplace chat tool Slack and counts Ford, GE Appliances and Humana among its customers, is the latest in a growing list of big tech companies that have slashed their workforce as huge pandemic sales booms wane and a possible recession looms.
Facebook parent Meta announced it would lay off 11,000 people last fall, and Amazon is in the process of cutting about 10,000 people. Other big tech companies have instituted hiring freezes — all a dramatic turnaround from the past decade of explosive growth in Silicon Valley.
Amazon starts widespread layoffs in corporate ranks
Salesforce said it would also pare back its office space as part of its plan to reduce costs, including “select real estate exits.” The company’s headquarters are in the tallest building in San Francisco, called the Salesforce Tower. It did not specify whether the tower would be affected by the reduction plans, and representatives declined to provide further details beyond what was mentioned in the filing and Benioff’s email.
Salesforce, like many of its fellow tech giants, has been dealing with slowing sales growth. Its other co-CEO, Bret Taylor, recently announced that he will leave the company at the end of this month. He also served as chairman of Twitter for much of this year, before Elon Musk bought the company and the board was disbanded.
Salesforce’s revenue growth rate slowed to 14 percent last quarter. The company’s stock dropped nearly 50 percent last year, as tech stocks sustained a dismal year amid slowing growth and economic uncertainty.
Shareholders were rewarded Wednesday by Salesforce’s plan to cut costs, and the stock rose more than 2 percent.
“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 Securities analysts Dan Ives and John Katsingris wrote in a note Wednesday morning.
Salesforce said some employees who were being laid off would get an email Wednesday morning and would hear from company leadership. Employees in the United States would get nearly five months of severance pay and benefits, Benioff wrote in his email.
Despite big tech’s faltering and global economic uncertainty, job openings in the US have remained fairly steady. The Bureau of Labor Statistics reported at the end of November that the number of job openings was “little changed” at 10.5 million.
But the newly laid-off workers might face strong competition with other tech professionals for the best positions.
Twitter cut about half of its workforce when Musk took over the company. Added to the cuts from Meta, Amazon, Lyft, Netflix, Shopify and many others, tens of thousands of tech workers have been left looking for jobs in the past year, in a market that was once a sure bet for employment.