Salesforce laying off 10 percent of workforce in restructuring

Just In | The Hill

The business software giant Salesforce is set to lay off 10 percent of its workforce, nearly 8,000 employees, and cut back its office spaces, according to a letter to employees on Wednesday citing concerns about the direction of the economy.

“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” the company’s Chief Executive Officer Marc Benioff said in the letter.

The decision by Salesforce is the latest in a string of moves by tech companies to turn to layoffs amid fears of inflation and a looming recession. In November, Meta, the parent company of Facebook, announced it would lay off 11,000 employees. In the same month, HP said it planned up to 6,000 layoffs over the next three years. Amazon has also said it plans to let go of 10,000 workers.

Like other tech companies, Salesforce’s revenue surged throughout the pandemic as people turned to work-from-home policies and relied heavily on technology to stay connected. Benioff said the company hired “too many people” as its revenue grew, leading to the need for workforce cuts.

“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,” Benioff said.

Talk of a possible recession on the horizon for the U.S. economy has accelerated. This week, former Federal Reserve Bank of New York President William Dudley said a recession was “pretty likely.”

“A recession is pretty likely just because of what the Fed has to do,” Dudley said in an interview with Bloomberg on Tuesday. “But what’s different this time I think is that if we have a recession, it’s going to be a Fed-induced recession and the Fed can end the recession by subsequently easing monetary policy.”

A survey by the Wall Street Journal also found that two-thirds of economists believe that a recession is near.

News, Finance, layoffs, Recession, Salesforce, tech companies, technology Read More