The software company employs more than 79,000 people, making it one of the most well-known cloud computing companies. This could mean that nearly 8,000 people could be affected by the layoffs. The layoff plans were also disclosed in an organizational filing.
Salesforce, which is the owner of the popular workplace chat software Slack, counts Ford, GE Appliances, and Humana as its clients. It is just one of a growing number of large tech companies that have had to reduce their workforces due to a major pandemic. A potential recession is in the horizon as the sales boom is slowing.
The parent is on Facebook Meta announced that it would lay off 11,000 peopleAmazon worked on last fall’s Cut about 10,000 people. Video streaming company Vimeo said WednesdayIt will layoff approximately 11% of employees, or around 140 people, “due in part to the uncertain economic environment.” Other tech companies have also frozen hiring, a dramatic turnaround after the past decade of rapid growth in Silicon Valley.
Salesforce announced that it will reduce its office space as part its cost-cutting plans, including “exiting certain properties”. The Salesforce Tower, San Francisco’s tallest building, houses the company headquarters. He didn’t say if the tower would suffer from the lowering plans. Representatives declined to give more information beyond what was in Benioff’s email and filing.
Salesforce has seen a rapid increase in its employee base since the pandemic. The number of employees has jumped from 49,000 at the beginning of January 2020, to 79,000 now. It will still have more employees than it had before the cuts. Corona VirusThe epidemic has already begun.
Like many tech giants like Salesforce, Salesforce has faced slowing sales growth. Brett Taylor, the co-CEO of Salesforce, is also on the team. Recently announced He will be leaving the company at the close of the month. He was also the chairman for Twitter for the majority part of this year before Elon Musk bought it and the board of director members was disbanded.
Salesforce’s revenue growth rate has slowed to 14% in the last quarter. The company’s stock dropped by 50 percent last year. This is due to technology stocks suffering a poor year in the face of slowing growth and economic uncertainty.
Salesforce’s cost-cutting strategy was rewarded by shareholders on Wednesday. The stock rose more that 2 percent.
“This is a smart poker move by Benioff to keep margins in an uncertain background, as the company has clearly overbuilt its foundation over the past few years along with the rest of the tech sector with a slowdown now looming,” Wedbush analysts said. Securities Dan Ives, John Katsingris, wrote a note Wednesday morning.
Salesforce announced that some of the laid off employees will receive an email Wednesday morning. The email will let them know how to get in touch with the company’s leadership. Benioff explained that US employees will be receiving approximately five months of severance payments and benefits.
Benioff is well-known for his activism and donations to the homeless. He also promotes the “Ohana”, a culture at Salesforce that uses the Hawaiian word for family.
“The affected employees are not just colleagues. They are friends. Please reach out to them,” he wrote in his email to the staff. Offer the compassion and love they and their families deserve and need now more than ever.”
Some experts have seen headcount cuts as a good thing for the tech industry — Silicon Valley companies have been growing so fast for so long that they’ve needed some leveling up, they say. They also left thousands of people searching for work in an uncertain economy.
Despite the stumbles of major tech companies and global economic uncertainty, US job vacancies have remained relatively stable. The Bureau of Labor Statistics reported that at the end of November, 10.5 million job openings had been created.
According to ZipRecruiter, the majority of people who were laid off from tech have found new jobs within a few short months. However, those newly laid off may face increased competition from other technology professionals for top positions.
According to Julia Pollack, chief economist at ZipRecruiter, some workers will find work in the tech sector, while others will need to look into other industries such as retail, manufacturing and hospitality.
“For workers who want rehired in tech, they’re going have a harder time and a less competitive environment,” she stated. “I expect things will get worse before they get better.”
This is especially true for those who are laid off in non-technical positions, such as marketing or hiring. Pollack mentions that many companies have layoffs in December and Jan, which are slower months for hiring.
However, she stated that tech companies are still hiring in certain areas despite the cuts. She also said that other industries are eager for tech talent.
When Musk took over Twitter, it cut half its workforce. In a market that was once a strong place for employment, there have been thousands of tech workers left searching for jobs over the past year.
Shira Ott contributed to this report.
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