Salesforce will lay off 10% of its staff and reduce office space

Salesforce, the enterprise software giant, said Wednesday it plans to lay off 10% of its workforce, or about 8,000 employees, and reduce office space due to concerns about the economy.

“The environment remains challenging and our customers are taking a more measured approach to their buying decisions,” Marc Benioff, the company’s co-chief executive, said in a memo to employees announcing the cuts.

Salesforce’s revenue, like that of many other tech companies, skyrocketed during the pandemic as more people around the world worked from home and relied more on technology to collaborate with remote colleagues. In his letter, Mr. Benioff suggested that the company had hired too aggressively during this period.

Salesforce employed just under 80,000 people at the end of October, down from around 48,000 three years earlier.

“We hired too many people leading to this economic downturn that we are currently facing, and I take responsibility for that,” Mr. Benioff said.

A Salesforce spokeswoman said the company had no further comment on the cuts.

The layoffs highlighted the slowdown in the tech industry. In recent months, tech giants like Amazon have slowed hiring and cut jobs, while smaller companies like Lyft and Stripe have also announced layoffs. Many of the biggest companies in the sector have released financial results suggesting they are feeling the effects of stubbornly high inflation and rising interest rates.

Social media companies have struggled with a decline in digital advertising in particular. Meta, which owns Facebook and Instagram, cut 13% of its employees in November and said its workforce would remain “about flat” through the end of this year. Snap, Snapchat’s parent company, laid off 20% of its employees in August, blaming difficult macroeconomic conditions. Elon Musk, who bought Twitter for $44 billion in October, has more than halved the company’s workforce.

Salesforce’s sales grew 14% in its latest quarter, the slowest pace in years; it expected even slower growth in its current quarter. Other tech chiefs, like Meta’s Mark Zuckerberg, recently admitted hiring too many people as they rushed to make cuts. More than 150,000 tech workers were laid off last year, according to Layoffs.fyi, a site that tracks job cuts.

In November, Bret Taylor, co-CEO of Salesforce, announced that he would be stepping down and leaving at the end of that month. In December, Stewart Butterfield, chief executive of Slack, a workplace communications platform owned by Salesforce, also said he would step down by the end of the month. Salesforce bought Slack for $27.7 billion in 2020.

Salesforce is San Francisco’s largest private employer and its flagship office building is the tallest in the city.

The company estimated the changes would cost up to $2.1 billion. Salesforce offers U.S. employees a minimum of five months’ salary, as well as health insurance and professional resources, Benioff said. Most of the cuts will be made “over the next few weeks,” he wrote.

Salesforce shares rose more than 3% in trading on Wednesday. The company’s stock price fell almost 50% last year.