Salesforce to lay off 10% of workforce to cut costs amid economic downturn
Salesforce CEO Marc Benioff admitted that the company had 'hired too many people' as revenue soared during pandemic
Big Tech preparing for layoffs as recession looms: Mark Mahaney
Evercore ISI senior managing director Mark Mahaney reveals which stocks could outperform if the US economy is hit with a recession on 'Varney & Co.'
Salesforce Inc. said on Wednesday it will lay off 10% of its workforce as part of a plan to reduce operating costs and improve operating margins amid the challenging economic environment.
The software company also announced plans to reduce office space and exit some real estate in an effort to reduce expenses, it said in a filing with the Securities and Exchange Commission.
AMAZON HALTS CORPORATE HIRING CITING 'UNCERTAIN' ECONOMY
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CRM | SALESFORCE INC. | 339.69 | +14.01 | +4.30% |
Salesforce CEO Marc Benioff said in a letter to employees Wednesday that the company "hired too many people" leading into the economic downturn as revenue accelerated during the pandemic, and now it's facing the consequence of that.
"The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Benioff said.
Salesforce CEO Marc Benioff speaks during a news conference, in Indianapolis. (AP Photo/Darron Cummings, File / AP Newsroom)
Benioff said he is taking full responsibility for this action, and that the workforce reductions will take place over the coming weeks.
AMAZON CEO SAYS LAYOFFS WILL CONTINUE IN 2023
Salesforce has become the latest in a growing list of companies that have implemented cost-cutting measures after hiring rapidly during the pandemic.
DoorDash, Amazon, Apple, Meta Platforms, Lyft and Twitter were among the companies that have announced hiring freezes or layoffs in recent months. In fact, Amazon CEO Andy Jassy told employees in a memo made public that layoffs will continue in 2023.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
In an October filing with the SEC, Salesforce said it increased its headcount by 32% over the past year "to meet the higher demand for services from our customers." As of Oct. 31, the company had 79,824 employees, according to its latest earnings report.
Salesforce expects to incur $1.4 billion to $2.1 billion in related charges from the restructuring plan announced on Wednesday. About $800 million to $1 billion of that is expected to be incurred in the fourth quarter of fiscal year 2023, the company said.