Salesforce, the enterprise software giant, said Wednesday it planned to lay off 10 percent of its workforce, or about 8,000 employees, and scale back office space over concerns about the economy.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” said Marc Benioff, the company’s co-chief executive, in a message to employees announcing the cuts.
Sales at Salesforce, like many other tech companies, boomed during the pandemic as more people around the world worked from home and relied more on technology to collaborate with colleagues remotely. In his letter, Mr. Benioff suggested that the company had been hiring too aggressively during that period.
Salesforce employed nearly 80,000 people at the end of October, up from about 48,000 three years earlier.
“We hired too many people, which led to this economic downturn that we’re going through now, and I take responsibility for that,” said Mr. Benioff.
A spokeswoman for Salesforce said the company has no further comment on the cuts.
The layoffs further accentuate the slowdown in the technology industry. In recent months, tech giants like Amazon have slowed hiring and job cuts, while smaller companies like Lyft and Stripe have also announced layoffs. Many of the industry’s largest companies have reported financial results that suggest they are feeling the effects of stubbornly high inflation and rising interest rates.
Social media companies in particular have struggled with a decline in digital advertising. Meta, which owns Facebook and Instagram, cut 13 percent of its employees in November and said the number of employees would remain “roughly the same” through the end of this year. Snap, Snapchat’s parent company, laid off 20 percent of its employees in August due to the difficult macroeconomic conditions. Elon Musk, who bought Twitter in October for $44 billion, has cut the company’s workforce by more than half.
Salesforce revenue grew 14 percent in the last quarter, the lowest rate in years; it predicted even lower growth in the current quarter. Other tech chiefs, such as Meta’s Mark Zuckerberg, have recently admitted that they overhired because they rushed to cut spending. More than 150,000 tech workers were laid off last year, according to Layoffs.fyi, a site that tracks job losses.
In November Bret Taylor, co-chief executive of Salesforce, announced that he would be stepping down and leaving at the end of this month. In December, Stewart Butterfield, the CEO of Slack, a workplace communications platform owned by Salesforce, also said he would step down from his position by the end of this month. Salesforce bought Slack in 2020 for $27.7 billion.
Salesforce is the largest private employer in San Francisco and its main office building is the tallest in the city.
The company estimated the changes would cost up to $2.1 billion. Salesforce offers US employees a minimum of five months’ wages, as well as health insurance and career opportunities, Mr. Benioff said. Most of the cuts will be implemented “in the coming weeks,” he wrote.
Shares of Salesforce rose more than 3 percent in trading on Wednesday. The company’s share price fell nearly 50 percent last year.
