Salesforce, the San Francisco-based cloud computing giant and the city’s largest private employer, has announced plans to cut around 10% of its workforce, approximately 8,000 employees. The company has grown significantly during the pandemic, but now plans to close an unspecified number of offices due to the economic downturn.
In a letter to employees, co-CEO Marc Benioff acknowledged that the company had hired too many people in the previous months and expressed his responsibility for the situation. The move is a blow to San Francisco’s struggling downtown area and office market, where vacancy is currently at a record high of 27%.
Salesforce expects to spend between $1.4 billion and $2.1 billion on expenses related to the layoffs, which are expected to be completed by the end of January 2024. Affected U.S. workers will receive a minimum of almost five months of pay and health benefits.
This marks one of the largest rounds of tech layoffs in recent years, with the company’s downsizing joining the likes of Oracle, Cisco, and Intel, as well as smaller firms like Chime, Coinbase, and Asana.
The decision to lay off such a large portion of its workforce comes as Salesforce plans to close an undisclosed number of offices due to the economic downturn caused by the pandemic. The company’s workforce grew by more than a third during the pandemic. Salesforce shares were up over 3% during Wednesday trading.
