The company said Wednesday that business software giant Salesforce has laid off 10 percent of its workforce, or about 8,000 employees, and is scaling back office space due to concerns about the economy.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” the company’s CEO, Marc Benioff, said in a note to employees announcing the cuts.
Salesforce’s revenue, like that of many other tech companies, has exploded during the pandemic, as more people worldwide are working from home and relying more on technology to collaborate with colleagues remotely. In his letter, Mr Benioff suggested that the company was recruiting very aggressively during this period of growth.
Salesforce employed just under 80,000 people at the end of October, up from around 48,000 people three years ago.
“We’ve recruited so many people that led to this economic crisis we’re facing right now, and I take responsibility for that,” said Mr Benioff.
The company’s sales increased 14 percent in the last quarter, the slowest pace in years; predicted even slower growth in the current quarter. Other tech chiefs, like Meta’s Mark Zuckerberg, recently admitted that they hired too many people in a hurry to cut back. More than 150,000 tech workers were laid off last year, according to Layoffs.fyi, a site that tracks layoffs.
Salesforce is the largest private employer in San Francisco, and its flagship office building is the tallest building in the city.
The company estimates the changes will cost $2.1 billion. Mr Benioff said Salesforce offers US employees at least five monthly salaries, as well as health insurance and career resources. He wrote that most of the cuts will come “in the coming weeks”.
Shares of Salesforce rose more than 4 percent in premarket trading on Wednesday. The company’s stock price has dropped nearly 50 percent last year.