Salesforce to cut staff by 10% in latest layoffs

STORY: Salesforce said on Wednesday (January 4) it would lay off about 10% of staff and close some offices, becoming the latest tech firm to cut costs amid an economic slowdown.

The company expects it will take about up to $2.1 billion in charges due to the restructuring.

Around half of that will be recorded in the fourth quarter of fiscal 2023.

Co-Chief Executive Marc Benioff said in a letter to employees:

"The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions”.

Companies from Meta to Amazon have taken steps in the past year to prepare for a deep downturn

That as global central banks have aggressively raised interest rates to tame decades-high inflation.

And businesses that relied on cloud services during the health crisis are now trying to reduce expenses.

This has hurt companies like Salesforce, which owns work messaging app Slack, and Teams-parent Microsoft.

As revenue accelerated through the pandemic, Salesforce hired “too many people”, Benioff said, stating he “takes responsibility”.

Affected U.S employees will receive a minimum of about five months' pay.

Salesforce growth has slowed during the past four quarters, with the company posting its weakest revenue increase for the three months to the end of October.

Its shares rose 3% before the bell, after losing nearly half of their value last year.