San Francisco's Salesforce to lay off 10% of employees, close some offices

Salesforce said it's laying off about 10% of its employees and closing some offices, as the company hired too many during the pandemic when things were looking good. 

It's the latest Silicon Valley "bloodbath," as companies including Stripe, Lyft, Coinbase, Robinhood, Meta and Twitter are also cutting workers, while Amazon and Apple have announced hiring freezes. 

"The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," co-Chief Executive Officer Marc Benioff said in a letter to employees filed with the Securities Exchange Commission. "With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks."

Benioff acknowledged that Salesforce hired too many people during the pandemic and he said he takes "responsibility" for not foreseeing the current economic downturn. The company increased its staffing by 30% since 2020. 

Benioff said that employees were notified by email and Salesforce will "fully support them," including "offering a generous package." 

In the United States, employees will receive a minimum of nearly five months of pay, health insurance, career resources, and other benefits to help with their transition, Benioff said. 

Those outside the U.S. will receive a similar level of support, and our local processes will align with employment laws in each country, he told the SEC.

Reuters reported that Salesforce expects the move to lead to about $1.4 billion to $2.1 billion in charges, of which about $800 million to $1 billion will be recorded in the fourth quarter of fiscal 2023. 

Salesforce growth has slowed during the past four quarters, with the company posting its weakest revenue increase for the three months ended Oct. 31, as a strong dollar also eats into its sales.

In addition, Salesforce will also cut back on office space. 

In closing, Benioff said those being let go "aren't just colleagues. They're friends. They're family." 

Salesforce had 73,541 employees at the end of January last year; about 10,000 work in the San Francisco Bay Area.