According to Salesforce co-CEO Marc Benioff, the company is cutting up to 10% of its current staff. In an email noted by Business Insider, Benioff blames mid-pandemic hiring practices.
The business “environment remains challenging,” Benioff wrote in the email sent January 4, “and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.
“I’ve been thinking a lot about how we came to this moment,” Benioff continued, “as our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”
Employees of the cloud-based software company who are let go will receive nearly five months of pay, insurance, and other resources. Salesforce indicated in a regulatory filing noted by Business Insider that its budget for all the costs in making cuts will spend $1 billion and $1.4 billion on employee transitions in addition to as much as $650 million on reducing office spaces.
Salesforce‘s cuts are part of a trend that has seen other tech giants like Facebook and Amazon take similar measures in anticipation of a looming recession. We’ll likely continue to see job cuts and restructuring efforts elsewhere in the coming months. Though tough on employees and their families, such measures are often necessary for companies to remain financially viable when facing economic uncertainty.