By Reuters via
NBC News
US company Salesforce plans to cut 10% of its workforce and close some offices, saying it needs to cut costs after rapid hiring left it with "too many people" amid an economic slowdown, sending its shares up 5 %.
Salesforce anticipates incurring costs of $1.4 billion to $2.1 billion to carry out its cuts.
That includes $1 billion to $1.4 billion in charges related to employee transition, severance pay and benefits.
Last year, companies including Meta Platforms and Amazon cut their workforces fearing a potential recession, while central banks aggressively raised interest rates to rein in stubbornly high inflation.
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Companies that relied on cloud services during the pandemic are now trying to cut costs by cutting staff or postponing new projects, hurting companies like Salesforce and Microsoft.
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Co-CEO Marc Benioff said in a letter to employees.
“As our revenues increased during the pandemic, we hired too many people, which led to this economic downturn we now face, and I take responsibility for it,” Benioff added.
Salesforce had 73,541 employees at the end of January
last year, 30% more than in 2021.