The CEO of Salesforce Marc Benioff has disclosed plans to downsize more of the company’s workforce, days after disclosing layoff plans.
This recent disclosure is coming after Marc had earlier revealed plans to cut the global workforce by about 10% and as well reduce its real estate footprint.
He therefore disclosed that massive job cuts were necessitated due to concerns about productivity in parts of the sales organization.
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Salesforce reported a year-over-year decline in global digital sales for Q1 2022 as recorded by its Shopping Index, the first-ever decline in the nine-year history of the index.
In August 2022, it gave a forecast for its quarterly revenue that fell short of analysts’ estimates, as the software company suggested that the unfriendly economy caused some customers to slow spending on business software.
Also, the company was faced with stiff competition from competitors such as Microsoft Corp’s (MSFT.O) Azure, Amazon.com Inc’s (AMZN.O) Amazon Web Services and Alphabet Inc’s (GOOGL.O)Google Cloud.
However, Salesforce reported better-than-expected revenue for the third quarter of 2022, boosted by strong demand for its cloud-based software. This saw its revenue rise to 27%, $6.86 billion in the quarter, beating analysts’ estimate of $6.8 billion.
The company reported earnings of $1.27 per share, also above estimates of 92 cents per share.
Meanwhile Salesforce isn’t the only company that has laid off a large per cent of its workforce. U.S. companies, from tech majors to consumer firms, are also faced with an economic downturn, which has forced several of them to shrink their employee base to streamline operations.
Job cuts announced by US-based employers jumped 13% to 33,843 in October last year, the highest since February 2021, according to a report.
Facebook parent company Meta cut 13% of its workforce, more than 11,000 employees, in one of the biggest tech layoffs last year, as it grappled with a weak advertising market and mounting costs.
Software giant Microsoft laid off under 1,000 employees across several divisions in October.
Also, e-commerce giant Amazon has laid off some employees in its devices group, with the company saying it still targeted around 10,000 job cuts, including in its retail division and human resources.