Salesforce will fire about 10% of its workforce and reduce its real estate holdings after the enterprise software company hired too many people during the pandemic-fuelled boom and is now adjusting to more cautious spending by its customers.
The company, which has about 80,000 employees, said in a regulatory filing on Wednesday that it aims to complete the workforce restructuring by the end of fiscal 2024. The reductions will cost $1.4bn-$2.1bn, the company said. As much as $1bn of that will come in its fiscal fourth quarter.
Many tech companies are suffering in the wake of the Covid-19 growth spurt, which saw a surge in demand for electronics and cloud applications such as collaboration software as work and schooling shifted to homes. But the pace of that growth has proven impossible to maintain. Across the industry, sales of smartphones and PCs are slowing worldwide. Salesforce and peers like Zoom Video Communications and ServiceNow have seen customers heavily scrutinising software spending as the economy retrenches.