Salesforce will reduce 10 percent of its workforce in the latest tech layoffs

Salesforce Inc. intends to reduce its workforce by 10 per cent and close certain offices. It says it is necessary to reduce costs after rapid pandemic recruitment left it with. “too many people” During an economic slowdown, its shares rose 5 percent.

The cloud-based company that makes software said Wednesday it expected to pay between $1.4 billion & $2.1 billion in job loss charges. A fourth quarter charge of approximately $800 Million – $1 billion was recorded.

In the past year, companies ranging from Meta Platforms Inc. and Amazon.com Inc. reduced their workforce to prepare for a severe downturn. Global central banks have raised interest rates aggressively to control stubbornly high inflation.

Cloud services were used by many businesses during the pandemic. Now, they are trying to cut expenses and defer new projects. This has hurt companies like Microsoft Corp.

“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Marc Benioff, coChief Executive Officer, said this in a note to employees.

“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,” Benioff was also added.

Salesforce had 73 541 employees at the end January, which was a 30% increase over 2021.

The company’s growth has slowed during the past four quarters, with Salesforce posting its weakest revenue increase in the third quarter.

“Companies will want to show voting shareholders that they can once again deliver value through investment returns even amidst a downturn,” Joshua White, a Vanderbilt University finance professor, said: “Layoffs will be a big part of that equation.”

Salesforce announced that affected employees in the United States would receive at most five months of pay, insurance and other benefits.