Salesforce lays off around 8,000 in one of tech’s biggest cuts in years

Salesforce will cut around 10% of its nearly 80,000-person workforce in one of the biggest rounds of tech layoffs in years.

The cloud computing giant, which is San Francisco’s largest private employer, also plans to close an unspecified number of offices after growing too much during the pandemic, according to a regulatory filing.

“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Co-CEO Marc Benioff wrote in a letter to employees that was shared publicly. “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions.”

It isn’t clear how many of Salesforce’s roughly 10,000 San Francisco employees will be affected, but the move is another blow to the city’s struggling downtown core and office market, where vacancy is a record-high 27%, according to real estate brokerage CBRE. The company has offices in its namesake Salesforce Tower, the city’s tallest building, along with two nearby high-rises, where it had already been shedding space during the pandemic.

California officials have not yet received a notice from Salesforce on how many statewide layoffs are planned, the state Employment Development Department said.

Salesforce previously laid off hundreds of salespeople late last year, and its new round of layoffs are far larger, dwarfed only by Meta’s 11,000 layoffs in the tech industry in recent months. Downsizing has been widespread, hitting giants such as Amazon — which reportedly could lay off as many as 20,000 people, though the company has not confirmed a specific number — as well as Oracle, Cisco and Intel, along with smaller firms including Chime, Coinbase and Asana.

Salesforce expects to spend between $1.4 billion and $2.1 billion in expenses related to the layoffs, and expects to complete the process by the end of the company’s 2024 fiscal year at the end of January 2024. Affected U.S. workers will receive a minimum of almost five months of pay and health benefits. The company’s workforce grew by more than a third during the pandemic.

A wave of top executives are also departing, including Co-CEO Bret Taylor, whose resignation is effective at the end of the month. Slack CEO Stewart Butterfield is also leaving this month, after Salesforce bought the messaging company for $27.7 billion in 2021.

“This is a smart poker move by Benioff to preserve margins in an uncertain backdrop as the company clearly overbuilt out its organization over the past few years along with the rest of the tech sector with a slowdown now on the horizon,” Wedbush Securities tech analyst Dan Ives wrote in a research note on Wednesday.

Experts, including ZipRecruiter’s chief labor economist Julia Pollak, had predicted that layoffs, particularly in tech, would continue into the new year, a time when many company reassess their finances and make cuts.

Pollak tweeted that while many CEOs, including Benioff, have said recent layoffs were the result of overly aggressive hiring during the last couple years, that wasn’t necessarily the case. Instead, Pollak said, it makes sense for tech companies to say they took advantage of “a once-in-a-lifetime opportunity to expand market share, with so many people online” during the pandemic.

Salesforce shares were up over 3% during Wednesday trading.

Ted Egan, San Francisco’s chief economist, said the wave of tech layoffs was a sign of an economic slowdown, but the city’s labor market has shown resiliency after months of steady job growth and many layoffs are happening outside the region — even with Bay Area-headquartered companies. The city’s unemployment rate was a minuscule 2.3% in November, according to state figures. San Francisco and San Mateo counties added a combined 4,100 jobs in the month, including 600 jobs in the tech-heavy information sector. December data is expected in two weeks.

“That data is really healthy” with “no signs of a recession,” Egan said. “There’s clearly a sign of cooling.”

Robbie Silver of the nonprofit Downtown San Francisco Partnership business group said the news of yet another large layoff once again links the city with tech job losses and could make the downtown area less attractive to small businesses.

“It makes us realize now more than ever that downtown S.F. needs to diversify its economic portfolio, and quickly.” Silver said. “We as a downtown cannot rely on a monoeconomic industry like tech.”

While Salesforce has said it plans to close offices as part of the layoffs, it was not clear exactly what the job cuts might mean for the company’s remote work policy implemented during the pandemic.

Benioff has recently raised concerns over the productivity of employees hired remotely during the pandemic, implying that the flexible office policy might be to blame, according to Zoe Schiffer of the Platformer newsletter.

But the economic blow of further job losses in San Francisco and in the Bay Area will be softened, Egan said, because many workers were already remote at least part-time, meaning they weren’t spending as much time and money downtown.

“I think the impact of the loss will be more muted, but we will feel it,” he said. “The economy is going to slow. I don’t have fundamental worries.”

https://www.sfchronicle.com/tech/article/Salesforce-lays-off-around-8-000-in-one-of-17694330.php

(http://www.autoadmit.com/thread.php?thread_id=5264990&forum_id=2\u0026mark_id=5310486#45742532)

(http://www.autoadmit.com/thread.php?thread_id=5264990&forum_id=2\u0026mark_id=5310486#45742644)

I didn't like the new team and they gave me ~8 months severance so I'm pretty content with the situation

(http://www.autoadmit.com/thread.php?thread_id=5264990&forum_id=2\u0026mark_id=5310486#45746029)

https://www.reddit.com/r/salesforce/comments/103zjqn/found_on_linkedin_salesforce_laying_off_10_of/

(http://www.autoadmit.com/thread.php?thread_id=5264990&forum_id=2\u0026mark_id=5310486#45746045)

Wow, excellent use of "decimating"

(http://www.autoadmit.com/thread.php?thread_id=5264990&forum_id=2\u0026mark_id=5310486#45747149)

https://www.businessinsider.com/salesforce-reportedly-paying-mcconaughey-millions-despite-layoffs-2023-2

(http://www.autoadmit.com/thread.php?thread_id=5264990&forum_id=2\u0026mark_id=5310486#45995560)