Salesforce CEO Admits Company Over-Hired, Reduces Staff by 10%

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Amid a “challenging” environment, Salesforce Co-CEO Marc Benioff announced this week the company will trim 10% of its staff.

Salesforce cut 10% of its workforce, or around 8,000 employees, according to CEO Marc Benioff’s Jan. 4 letter to employees. As of October 2022, Salesforce reportedly employed 79,824 staff globally.

Benioff, who leads the customer relationship management (CRM) and marketing technology software company that bought Slack for $27.7 million two years ago, took responsibility for the layoffs.

“I’ve been thinking a lot about how we came to this moment,” Benioff wrote. “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.”

In the letter, Benioff advised that initially affected employees would receive an email within the hour — and promised a “generous package” for US employees to include “a minimum of nearly five months of pay, health insurance, career resources, and other benefits to help with their transition” — and said those outside the US would receive similar support in keeping with their country’s employment laws.

Pandemic Spawns Hiring Frenzy — That Didn’t Last

According to its quarterly reports, Salesforce added 25,267 more employees to its ranks since October 2020, including 10,294 additional staff hired between October 2021 and October 2022.

To meet surging demands from a public sequestered at home during COVID-19, some tech companies couldn’t recruit new staff fast enough (think Zoom). However, two years later, faced with a predicted US recession, increased labor expenses and a drop in consumer spending, many companies find themselves overstaffed for their current needs.

As 2022 ended, a flurry of layoff announcements began to circulate. Amazon announced plans to cut 10,000 jobs, Meta announced layoffs for 11,000 employees and Twitter, Zillow, Peloton, Cisco and others followed suit. Amazon executed layoffs this week — affecting 18,000 employees, the majority coming in the employee-experience-driven People, Experience, and Technology (PXT) organization — according to a Jan. 4 memo from CEO Andy Jassy.

Related Article: Salesforce Updates Service, Marketing Clouds With Conversational AI, CDP Enhancements

How Digital Customer Experience Companies Are Doing

What’s going on at other software providers that provide digital customer experience technology? In its Q4 and fiscal year 2022 revenue report, Adobe reported its digital experience segment revenue at $1.15 billion, while its digital experience subscription revenue was $1.01 billion, both areas representing 14% year-over-year growth or 16% in constant currency.

“Adobe’s outstanding financial performance in fiscal 2022 drove record operating cash flows of $7.84 billion,” Dan Durn, executive vice president and CFO of Adobe, said in a statement. “Strong demand for our offerings, industry-leading innovation and track record of top- and bottom-line growth set us up to capture the massive opportunities in 2023 and beyond.”

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