Per Bloomberg
Salesforce Plans to Cut 10% of Workforce and Reduce Real Estate Holding
1/5/2023
Salesforce, a company with 80,000 employees per the regulatory filing, plans to fire 10% of its workforce and completely restructure its company by 2024. This comes after the company almost tripled its workforce in the span of four years.
The cloud-based software company saw a massive increase in demand amid the pandemic as lockdowns forced people to stay at home and use software to communicate with each other. It just so happened that Salesforce software was an integral tool during the lockdowns, which led to the company massively hiring new employees.
Now, the company is looking to downsize its employees as it reportedly overhired during the pandemic. With Salesforce planning to let go of 10% of its workforce, this could result in 8,000 people losing their jobs, per the 80,000 reported number on a regulatory filing.
The downsizing will come at an initial cost for the company as the report says that reductions could result in a $1.4-$2.1 billion cost for Salesforce. Up to $1 billion of this cost could come from the company's Q4, with CEO Mark Benioff sending a letter to employees regarding how there was a change in the environment regarding customers.
Benioff: “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.”
From January 2020 to the end of October, the company grew its workforce by over 30,000. Still, as other tech companies are also laying off massive percentages of their workforce, Salesforce is following suit. Anurag Rana, a Bloomberg Intelligence analyst, stated how these cuts could benefit the company.
With the job cuts, the company is trying to adjust to how customers are now more cautious about their spending.
Rana: “Salesforce benefited from increased demand during the pandemic and hired aggressively as a result. These cuts could help management meet its adjusted operating margin goals”
See flow at unusualwhales.com/flow.
Other News:
- Elon Musk downsizes Twitter headquarters to two floors from six
- Amazon to lay off more than 17,000 workers
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