In the latest round of job cuts to hit the tech industry, Salesforce is laying off around 700 employees, roughly 1% of its global workforce. The move will impact the company’s global operations and aims to reduce costs. Salesforce announced a 10% reduction of its workforce in January 2023 and has since cut jobs at a rate of about 100 per week.
In a Slack message seen by CNBC, co-CEO Marc Benioff told employees that the company’s new hires aren’t producing at the level expected of them. He asked for feedback on the reason, adding, “This is a big deal for us as it has significant impacts on our business.”
According to reports, the latest layoffs will impact employees in sales and customer success roles. In a statement, a Salesforce spokesperson said the cuts were not related to a review of the company by consultants Bain & Co. and were intended to shift resources to areas of higher growth. The spokesperson also noted that the company still has 1,000 jobs open, implying the moves may be more of a routine adjusting of its workforce than a significant downsizing.
The company, specializing in cloud-based customer relationship management software, had about 70,000 employees in January. The latest move comes amid other tech companies reducing staff, including Google, Twitch, and Amazon. These layoffs are part of a broader trend in which companies seek to save money amid slowing economic growth and increased uncertainty about the future.
Amid this climate, Salesforce CEO Marc Benioff has emphasized that the company is focused on investing in its products and growth. In a recent earnings call, he acknowledged that some customers have delayed buying products and services because of the changing environment. However, he added that the company is continuing to grow revenue.
Despite the sluggish economy, Salesforce’s stock has risen to a record high this year. It’s the sixth-biggest stock on the Dow, with a market cap of $200 billion. However, it has struggled to compete with other publicly traded technology companies, which have posted better profit numbers and have a much larger market share.
Salesforce’s latest layoffs are a sign that the tumultuous economy is starting to affect tech companies, which are feeling pressure from investors to improve profitability and return cash to shareholders. Other companies that have cut back on spending recently include unified communications provider Nextiva and cloud services vendor Oracle. For more on the layoffs, check out our updated tech layoff tracker. Also, keep up with the latest news on artificial intelligence by signing up for our AI newsletter. — James Anderson, KPIX 5. This story is developing. Please come back for updates.
