Layoffs hit tech-industry again, Salesforce shows the door to 700 employees: Report

Salesforce layoffs: Clould-based customer relationship management software giant Salesforce is set to lay off approximately 700 employees across the company, constituting around 1 per cent of its workforce of about 70,000 individuals, reported the Wall Street Journal quoting a person familiar with the matter. This move follows a similar downsizing effort a year ago, where the company reduced its workforce by 10 per cent, affecting roughly 8,000 employees, responding to investor pressures to cut costs.

Salesforce's decision to trim its workforce is part of a broader trend in the tech sector, with other notable companies, including Google and Amazon, also implementing layoffs across various divisions. Despite the reduction, it still has 1,000 job openings, suggesting that this move may be a routine adjustment rather than a significant shift in its overall strategy, the report added. Last year, Salesforce faced challenges as a post-pandemic sales slowdown impacted its growth. Activist investors, such as Elliott Management, acquired stakes in the company, urging CEO Marc Benioff to accelerate margin expansion.

To meet these demands, Salesforce took various measures, including workforce reductions and cost-cutting initiatives such as curbing employee travel, reducing real estate holdings, and scaling back employee retreats. Despite these efforts, the company's stock demonstrated resilience, rising nearly 80 per cent over the past 12 months, outpacing the Nasdaq Composite Index, which saw a 37 per cent increase.

The surge in stock value can be attributed to improved profit margins and strategic adjustments made by the company. Salesforce is slated to announce its last quarter's earnings in March, providing a comprehensive overview of its financial performance and the impact of recent adjustments on its overall business trajectory.

The shares of Salesforce ended 0.78 per cent higher at $279.03 apiece on the NYSE on Thursday, January 25.