Salesforce fires hundreds of employees
The company says it supports employees affected by such moves
The US cloud software company Salesforce has become the latest tech firm to terminate its employees.
While the precise number of employees fired by the Salesforce is unknown, the company said the figure was less than a thousand.
Protocol was the first to report about the redundancies in Salesforce this week, claiming that up to 2,500 employees might be impacted by the company's employment cutbacks.
According to TechCrunch, those who were let go received the notice on Monday, October 7.
"Our sales performance process drives accountability. Unfortunately, that can lead to some leaving the business, and we support them through their transition," Salesforce said in a statement on the layoffs.
The firm had a workforce of 73,541 people at the end of January this year.
In an August filing, Salesforce said that its headcount increased 36% in 2021 to meet the growing demand for services during the pandemic. At that time, the firm released full-year earnings and revenue forecasts that fell short of expectations, sending its stock down 3% the next day.
Amy Weaver, Salesforce CFO, told analysts that demand from small and medium-sized enterprises had decreased, notably in North America and Europe, as well as in media, retail, consumer goods and communications.
At an Investor Day presentation last month, Weaver said that even though the company had set a goal of $50 billion in revenue by FY 2026, it was also looking to become more profitable by aiming for a 25% operating margin in the same time period.
Salesforce's co-founder and co-chief executive officer Marc Benioff said he anticipates lengthier sales cycles and more scrutiny of corporate acquisitions to continue.
It has been reported that activist investor Starboard Value, which announced last month that it would be taking a 'significant stake' in Salesforce, wants an increased profit target that can be achieved by cutting costs.
Last month, Salesforce terminated over 90 contract employees and put a freeze on new hires until January 2023.
A spokesman at the time said that "limited hiring continues," but most departments had already met their employment targets for the fiscal year.
Global tech giants are currently laying off employees to better position themselves for the imminent recession.
Meta, Twitter, Microsoft and Intel are among the businesses that have recently let go of their staff in recent weeks.
On Wednesday, Meta said it was firing more than 11,000 employees as it faces an economic downturn, dwindling investment and scepticism about its metaverse efforts. The cuts, which represent about 13% of Meta's worldwide workforce, are the first mass redundancies in the company's history.
Last month, Microsoft and Amazon also slashed their hiring targets, while Twitter has let go of fully half its workforce.