Salesforce restructuring sees layoffs in 10% of its staff, reductions in office space

Yahoo Finance Live anchors discuss Salesforce's restructuring initiatives as layoffs continue into the new year for the tech sector.

影片文字轉錄稿

DAVE BRIGGS: Shares of Salesforce rising more than 3% today as investors cheer mass layoffs. The software company cutting around 8,000 jobs, or 10%, in the latest head count cut in the tech sector. Said CEO Marc Benioff, quote, "the environment remains challenging and our customers are taking a more measured approach to their purchasing decisions."

Salesforce, like many tech companies, boomed during the pandemic with people hunkering down at home. With the soaring revenues came similar headcount, growing from about 48,000 to just under 80,000 at the end of October. That's an increase of more than 30%, Seana. It is not the beginning of tech layoffs, it appears to be far from the end.

SEANA SMITH: It certainly does. And I thought it was interesting-- Benioff really just taking responsibility for this-- for the fact that Salesforce grew way too quickly. He wrote part in that letter that you just wrote that we hired too many people leading into this economic downturn we are facing, and I take responsibility for that.

And I think this is largely reflective of the trends that we're seeing more broadly throughout the industry rather than this being a Salesforce-specific issue. Because when you take into account the fact that clients have been starting to scale back some of their spending, a lot of that being done in the enterprise space, which clearly affects Salesforce and more reflective of the softening that we're seeing, more so in the landscape rather than Salesforce losing some of that ground or losing market share to some of its competitors.

The stock, Dave, has been hammered over the past year-- shares off nearly 50%. I think many on the Street were maybe not expecting, but weren't necessarily going to be surprised if Salesforce was, in fact, forced to lay off people given the fact that they scaled so quickly, but that 10% number might have been a little bit higher than what some analysts were initially expecting to see.

DAVE BRIGGS: I think it most similarly follows the Amazon story in that another tech company that just really overbuilt during the pandemic and had to cut back under Andy Jassy-- a little different than the Meta story, which invested too heavily in, of course, the metaverse. If there's any sprinkling of good news-- five months of severance and benefits for those employees.

And a ZipRecruiter survey recently found that 79% of tech employees who were laid off found a new job in the next three months. Now, the question is, Seana-- and I think the question that Jay Powell is asking is, are those new jobs going to be at the same salary or lower and bring down inflation increases? That's what he needs-- the wage inflation to begin to come down.

SEANA SMITH: Well, at least at this point, it seems like the employee still has the upper hand-- obviously, it varies from industry to industry. But as these layoffs tend to increase, or if it keeps on the trend that we have been seeing, the employer will have the upper hand and maybe we will see salaries begin to come down a bit. And, simply, people aren't able to negotiate, maybe, for the salary that they want at their next job.