Salesforce said it would cut about 10% of its workforce after the enterprise software company hired too many people in the lead up to the economic downturn and customers became more cautious with spending.
The company aims for the workforce restructuring to be substantially complete by the end of fiscal 2024, it said in a regulatory filing on Wednesday. It will also reduce its property holdings in a plan that is expected to be completed in the 2026 financial year.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” CEO Marc Benioff said in a letter to employees on Wednesday. “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 in the letter that many of the affected employees would be notified within the “next hour” and will receive a minimum of about five months of pay, health insurance, career resources and other benefits. Those outside the US will receive a similar support aligned with local employment laws, the letter said.
The reductions will cost Salesforce US$1.4-billion to $2.1-billion, the company said. As much as $1-billion of that will come in the fourth quarter of the 2023 financial year. — Amy Thomson, (c) 2023 Bloomberg LP