Salesforce Cuts 10% of Workforce as Tech Giants Chop Jobs

Salesforce, which listed for sublease 412K SF last summer in one of its two namesake headquarters towers in San Francisco—where it is the largest private-sector employer—dropped the other shoe on Wednesday, announcing it will lay off 10% of its workforce, which totals an estimated 80,000.

The enterprise software giant hinted at more cuts to come—in its office footprint as well as its workforce—in a regulatory filing that said the company is undergoing a workforce restructuring it aims to complete by the end of fiscal 2024, to be accompanied by “real estate reductions” that will be completed by 2026.

The announcement comes on the heels of another harbinger of a deepening economic downturn: California’s state labor agency, known as the Employment Development Department (EDD), reported this week that in the fourth quarter 42 Bay Area tech and bioscience companies slashed their payrolls, initiating layoffs totaling at least 9,000 workers.

In a letter to employees on Wednesday, Salesforce CEO Marc Benioff took responsibility for “hiring too many employees” during the pandemic, Bloomberg reported.

“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 said in the letter. “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions.”

Salesforce has nearly tripled its workforce in the past five years, fueling its growth with a bevy of acquisitions. In the letter to employees, Benioff said laid off workers would receive a minimum of five months of severance pay.

California requires employers to file notices, known as WARN letters, with the EDD when they initiate layoffs.

The roster of tech companies that have notified EDD that they are planning to jettison jobs reads like an all-star team of tech giants, including Meta, Twitter, Amazon, Cisco, Lyft, Oracle, Roku, Doordash, PayPal and GoFundMe, according to a report in SiliconValley.com.

Meta Platforms has notified EDD it is eliminating 2,564 jobs in five of its Northern California facilities, including at its HQ in Menlo Park; Twitter is laying off 1,126 workers in San Francisco and San Jose.

San Jose-based Cisco Systems has announced it is laying off 5% of a global workforce estimated at 4,100, the report said. Palo Alto-based Hewlett Packard also has announced it will cut 4,000 positions from its global workforce.

In perhaps the most ominous sign of a deepening economic downturn, the heretofore red-hot life sciences sector also is trimming jobs in the Bay Area. Cephoid, a biotech firm, notified EDD that it is cutting 1,003 jobs at three NoCal facilities.

Other Bay Area companies that sent notifications in the fourth quarter included Argo AI, an autonomous vehicle startup, which cut 259 jobs in Palo Alto; Neotract, an East Bay maker of advanced medical devices, which pared 78 positions; semiconductor giant Global Foundaries, which cut 50 jobs in Santa Clara; and Abcam, a biotech firm in Milpitas, which laid off 30 workers, according to a report in SiliconValley.com.