Jan 4 – Salesforce Inc announced on Wednesday it would lay off about 10% of its workforce and close some offices, becoming the latest technology firm to cut costs as the economy slows.
The company expects the move to result in charges of approximately $1.4 billion to $2.1 billion, of which approximately $800 million to $1 billion will be recorded in the fourth quarter of fiscal 2023.
“The environment continues to be challenging and our customers are taking a more measured approach to their purchasing decisions,” co-CEO Marc Benioff said in a letter to employees.
Companies from Meta Platforms Inc ( META.O ) to Amazon.com Inc ( AMZN.O ) have taken steps to prepare for a deep downturn in the past year as global central banks aggressively raised interest rates to tame decade-high inflation.
Firms that relied on cloud services during the pandemic are now scrambling to cut costs by cutting jobs or delaying new projects, hurting companies such as Salesforce, which owns the office messaging app Slack, and parent Microsoft Teams ( MSFT.O ).
“As our revenue accelerated during the pandemic, we hired too many people, which led to the economic downturn we’re facing now, and I take responsibility for that,” Benioff said.
Sales force growth has slowed over the past four quarters, with the company reporting its weakest sales growth in the three months ended Oct. 31 as a strong dollar also ate into its sales.
The company said affected employees in the United States will receive at least five months’ salary, health insurance and other benefits, while those outside the country will receive “a similar level of support.”
Salesforce had 73,541 employees at the end of January last year.
Salesforce shares rose 3% before the bell, after losing nearly half of their value in 2022.