Salesforce, the owner of popular business communication app Slack and developer of other sales software, is planning to cut thousands of employees as part of a restructuring plan, according to a filing with the U.S. Securities and Exchange Commission (SEC) Wednesday.
The restructuring plan would cut roughly 10% of the company’s workforce and is anticipated to cost between $1.4 billion and $2.1 billion this year, with “employee transition” responsible for roughly $1.0 billion to $1.4 billion of the total expenses, according to the company’s SEC filing. Salesforce, like many other tech companies, grew rapidly during a pandemic-fueled tech boom, ballooning from 48,000 employees in October 2019 to nearly 80,000 at the same time in 2022, according to the New York Times.
“I’ve been thinking a lot about how we came to this moment,” wrote co-CEO Marc Benioff in a letter to employees. “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’s statement echoed that of Meta CEO Mark Zuckerberg, who wrote to his employees in November to “take responsibility for” overhiring during the pandemic that led to the company’s first mass layoffs in its nearly twenty-year history. The co-founders of payment processing startup Stripe also made a similar statement in November, citing excessive optimism about market conditions and rapidly growing costs.
Salesforce will give U.S. employees a minimum of “nearly five months” of severance pay, which includes health insurance and other benefits, including career resources, according to Benioff’s letter. Benioff promised a “similar level of support” to employees that were not U.S.-based, in accordance with local employment laws.
The company expects layoffs and “employee restructuring” will be complete by the end of the fiscal year 2024, according to its SEC filing. The company also expects to cut back on real estate and office space, a move it expects by the end of fiscal 2026.
Salesforce did not immediately respond to the Daily Caller News Foundation’s request for comment.
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