new Delhi: Salesforce is laying off more than 7,350 employees, about 10 percent of its workforce, in the latest round of job cuts in the tech industry as corporations cut software and other expenses. The San Francisco cloud computing software company will also be closing some offices, according to a regulatory filing Wednesday.
In a letter to employees, CEO Marc Benioff said the environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we have made the very difficult decision to reduce our workforce by approximately 10 percent, mostly over the coming weeks. ,Also Read: Amul Franchisee Business Idea: Invest Rs 2 Lakh, Make Profit Up To Rs 5 Lakh Per Month,
Benioff, who co-founded Salesforce in 1999, recently became sole CEO after Brett Taylor resigned as co-CEO and vice president in November. Benioff said the laid-off employees would receive approximately five months’ pay, health insurance, career resources and other benefits. ,Also read: Invest once in this scheme of SBI, will get monthly returns; Check Return Calculator, Interest Rate, Other Key Details,
It’s a smart poker move by Benioff to preserve margins in an uncertain backdrop as the company has clearly built its organization over the past few years with a downturn on the horizon along with the rest of the tech sector,” said Wedbush analyst Dan Ives. wrote in the client note.
The company estimates USD 1.4 billion to USD 2.1 billion in charges related to its plan. This includes charges ranging from US$1 billion to US$1.4 billion related to employee transition, severance pay, employee benefits and stock-based compensation. The office closure will result in $450 million to $650 million in fees.
It is expected to take approximately USD 800 million to USD 1 billion in charges in its fiscal fourth quarter. Tech companies hired aggressively during the pandemic to meet rising demand, but Salesforce had been growing rapidly since at least 2018. Its workforce is slated to more than double between then and 2021.
The employee restructuring efforts are expected to be completed by the end of Salesforce’s fiscal year 2024. The closure of its offices is expected to be fully completed in FY2026.