Memo: Salesforce plans to lay off around 10% of its staff and close some offices, expecting to incur $1.4B to $2.1B in charges for the restructuring

Salesforce Inc (CRM.N) said on Wednesday it would lay off about 10% of its employees and close some offices as a part of its restructuring plan …

Reuters 2023-01-04 Nivedita Balu

Context & Ripple Effects

Salesforce had already made a smaller workforce reduction that included some Tableau employees in 2020. The planned 10% cut is a much larger restructuring, pairing headcount reductions with office closures and sizeable associated charges.

Later coverage shows Salesforce returned to hiring in sales, engineering and data cloud after this restructuring, while subsequent smaller cuts indicate that the reset did not end workforce adjustments.

First-order effects

Salesforce employees affected by the planned 10% reduction and office closures face immediate job and workplace disruption, while the company records $1.4B–$2.1B in restructuring charges.
Salesforce’s operating organization is being resized across both personnel and physical offices rather than through a limited team-level reduction.

Second-order effects

Salesforce’s later sales, engineering and data-cloud hiring concentrates replacement investment in designated growth functions, changing which internal teams compete for resources after the cuts.
Recurring smaller reductions, including the planned 2024 cut of roughly 700 jobs, make workforce planning an ongoing management lever rather than a one-time response.

Third-order effects

The pattern points to a more selective enterprise-software employment model: broad restructurings can coexist with targeted hiring in priority products.
If Salesforce continues alternating cuts with focused hiring, its workforce mix will be shaped more by product priorities than by steady company-wide headcount growth.

The trend: Enterprise software companies are increasingly using large resets and targeted rehiring to shift resources toward selected product lines.

Discussion

@rhinosoros Dwight Rhinosoros on x
Maintain dividends with this one weird trick! https://twitter.com/...
@buccocapital @buccocapital on x
Salesforce announced a layoff of 10% of their workforce today (~7.3k). But they increased headcount by 17k employees last year alone. Management in tech let these companies get insanely bloated, and now employees are paying the price https://twitter.com/...
@blairkamin Blair Kamin on x
More bad news for downtown Chicago office market? Salesforce to Lay Off 10% of Workforce, Reduce Offices - WSJ; How does this effect Salesforce's Chicago tower at Wolf Point? https://www.wsj.com/...
@kantrowitz Alex Kantrowitz on x
Salesforce has 79,000 global employees so could be a cut of around 8,000 people. It recently said it increased headcount by 32% since October 2021. https://twitter.com/...
@joepwilliams31 Joseph on x
.@salesforce spox @CaroGuss tried to undermine my reporting that more layoffs were coming behind the scenes with other reporters under the guise of a"person familiar." Several fell for it, though I won't name names. Well, congrats cause you got played: https://www.reuters.com/...
@deitaone @deitaone on x
SALESFORCE INC - ON JANUARY 4, 2023, ANNOUNCED A RESTRUCTURING PLAN SALESFORCE INC - ESTIMATES THAT IT WILL INCUR APPROXIMATELY $1.4 BLN TO $2.1 BLN IN CHARGES IN CONNECTION WITH PLAN $CRM
@alexweprin Alex Weprin on x
The tech correction continues. Salesforce says it is cutting 10% of its staff. Expects to incur as much as $2.1B in charges. https://www.sec.gov/...
@jesskellynt @jesskellynt on x
Salesforce has had an Irish presence since 2000 and currently employs 2,100 people here. This is part of a restructuring plan. https://twitter.com/...
@conorsen Conor Sen on x
Salesforce cutting 10% of its headcount, reducing office space: https://twitter.com/...

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