Salesforce Inc. (CRM) will cut 10% of its workforce and shutter some offices as the customer relationship management software company shrinks after a pandemic hiring boom.
- Cloud software company Salesforce will reduce employee headcount by 10% and downsize office space, according to an SEC filing.
- Restructuring charges are expected to be as high as $2.1 billion, with about half incurred in the current quarter.
- Tech firms including Meta Platforms, Amazon, and Twitter have announced layoffs in recent months as the industry cuts costs following rapid expansion early in the pandemic.
- Inflation and interest rate hikes have weakened revenue growth across the tech industry.
First Tech Layoffs of 2023
The firm disclosed its plans Wednesday in an SEC filing, saying it expects the restructuring to incur charges of up to $2.1 billion and that $800 million to $1 billion of those costs will be recorded in the current quarter.
Up to $650 million of the restructuring charges will be the result of office space reductions. Salesforce said that it will close offices and exit real estate positions in certain markets but didn't provide details.
Salesforce's employee headcount was almost 74,000 as of January 2022, nearly a third larger than in 2021. The company is the latest in a growing list of tech firms to announce layoffs, including Meta Platforms Inc. (META), Snap Inc. (SNAP), and Twitter. Many of these companies aggressively increased their workforces during the pandemic and have now trimmed costs amid high inflation and a series of interest rate hikes.
Salesforce has reported decelerating revenue growth in the last year as customers reduce spending and become less reliant on cloud-based software than they were during COVID-related lockdowns. Revenue increased 14% year-over-year for the latest quarter reported, the slowest growth in several quarters.
Major Layoffs of 2022
Salesforce follows in the footsteps of several other tech companies, once buoyed by pandemic restrictions and supportive monetary policy, adjusting to a tougher economic environment. Below are the five companies that executed the biggest job cuts in 2022:
- On Nov. 9, Mark Zuckerberg told employees that Meta would be reducing its staff by around 13%, or approximately 11,000 employees. The company also implemented a hiring freeze that it is extending through Q1 2023.
- Peleton executed four rounds of layoffs last year. In total, the company lost 4,600 employees.
- On Nov. 4, a week after Elon Musk completed his purchase of Twitter, the social networking company announced it would be cutting 50% of its staff, or 3,700 workers.
- On Oct. 26, Seagate Technology announced a restructuring plan that would include slashing its workforce by approximately 8%, or 3,000 people.
- On May 10, Carvana cut 12% of its workforce, or 2,500 employees.