Salesforce cuts about 10% of its workforce
E-commerce giant Amazon Salesforce, a business software company, and Microsoft are the latest U.S. technology firms to announce job cuts. They have trimmed payrolls that had grown rapidly during the pandemic lockdown.
Amazon announced Wednesday that it would be reducing approximately 18,000 positions. This is the largest layoffs in Amazon’s history. However, it only represents a fraction of its 1.5million global workforce.
CEO Andy Jassy stated that Amazon has been able to weather difficult and uncertain economic times in the past and will continue to do so in a memo to employees, which was made public by the company. These changes will allow us to pursue our long-term potentials with a stronger cost structure.
He stated that the company’s brick and mortar stores, which include Amazon Fresh, Amazon Go, and its PXT offices, which handle human resource and other functions, will be most affected by the layoffs.
Jassy informed staff in November that layoffs were imminent due to the changing economic landscape and the company’s rapid hiring over the past few years. Wednesday’s announcement contained job cuts that were not announced previously. The company also offered voluntary buyouts, and has been reducing costs in other areas of its sprawling enterprise.
Salesforce, however, announced that it is laying off approximately 8,000 employees or 10% of its workforce.
Wednesday’s announcement is the largest in the 23-year history San Francisco company founded Marc Benioff. Benioff pioneered the concept of leasing software services to internet connected devices — now known as “cloud computing”.
These layoffs follow a shakeup at Salesforce’s top ranks. Benioff’s hand-picked COO Bret Taylor was also Twitter’s chairman during the painful $44 billion sale to billionaire. Elon Musk, left Salesforce. Stewart Butterfield, co-founder of Slack, left. Salesforce purchased Slack for $28 billion two years ago.
Salesforce workers who lose work will get nearly five months’ pay. Health insuranceAccording to Amazon, the company offers career resources, separation payment, and other benefits. Amazon also said it offers a separation payment, transitional insurance benefits and job placement support.
Salesforce’s sole chief executive, Benioff, wrote to employees that he was responsible for the layoffs because he continued to hire aggressively in the pandemic. With millions of Americans working remotely and the demand for Salesforce’s technology growing, Benioff is now the sole chief executive.
Benioff wrote that as our revenue increased through the pandemic, they hired too many people, leading to the economic downturn we now face.
In January 2020, Salesforce employed approximately 49,000 people just before the pandemic. Salesforce’s workforce is now 50% more than it was before the pandemic.
CEO of Meta Platforms Mark Zuckerberg He also admitted that he misunderstood the revenue gains that Facebook and Instagram’s owner was reaping during the pandemic. In November, he announced that his company would be laying off 11,000 employees or 13% of its workforce.
Salesforce’s recent decline from the panic of the pandemic has had a significant impact on its stock price, as have other major tech companies. Shares had plummeted more than 50% since November 2021, when they were at their highest point of $310. Closed at $139.59, the shares gained almost 4% Wednesday.
“This is a smart poker play by Benioff in order to preserve margins against an uncertain backdrop as it clearly overbuilt its organization over the last few years along the rest of tech sector with slowdown now on, wrote Dan Ives, a Wedbush analyst.
Salesforce also announced Wednesday that it would be closing some offices, but didn’t mention specific locations. The 61-story headquarters of Salesforce is a prominent feature on the San Francisco skyline. It has been a symbol of tech’s importance in the city since its completion in 2018.
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