Salesforce has announced to cut 10 percent of its workforce in a bid to reduce costs. Furthermore, the company said of Wednesday that they will also scale back its office space. Salesforce is the latest tech company which has laid off workers in recent months. Tech companies across the United States have laid off thousands of workers amid recession fears and inflation.

Chief Executive’s intimation

Salesforce is a software maker company which provides sales and customer services tools. Moreover, it has become one of the most prolific cloud computing company. The software company owns the popular workplace chat tool Slack. Large corporate giants including Ford, GE Appliances and Humana are its customers. The company has announced a major restructuring which will affect its workforce. In addition to laying off workers, the cloud computing company will also close some of its offices.

“The environment remains challenging 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%, mostly over the coming weeks. 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.” Marc Benioff, co-chief executive wrote in an email to employees announcing the cuts.

Office space reduction and severance for outgoing employees

Currently, Salesforce has an active workforce of more than 79,000 employees. A 10 percent cut in workforces implies that company will be laying off around 8,000 employees. Moreover, the company has already initiated the regulatory filings revealing its lay-off plans. Importantly, the laid off workers will get severance and benefits of nearly five months. Furthermore, the cloud computing company has announced to reduce office space as part of restructuring efforts to reduce costs. However, the company did not say anything whether the reduction in space will affect its headquarter in San Francisco. The company’s headquarters are in the tallest building in San Francisco, called Salesforce Tower.

Salesforce’s revenue growth rate slowed to 14 percent last quarter. Moreover, its shares also dropped by nearly 50 percent. The experts have termed the restructuring move as a positive one for the tech company.

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