Salesforce Inc. plans to cut about 10% of its staff as part of a restructuring plan, the software company said Wednesday.
The company will also exit some real estate and cut back on office space, it disclosed in a filing with the Securities and Exchange Commission. The plan is aimed to reduce operating costs, boost operating margins, and drive “profitable growth.”
Salesforce
CRM,
joins a host of other tech companies that have admitted in recent months that they grew too quickly for the current environment.
“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,” Co-Chief Executive Marc Benioff said in a letter to employees that was also filed with the SEC.
The company had 73,541 employees as of Jan. 31, 2022, according to its last annual filing with the SEC.
Salesforce expects that it will take $1.4 billion to $2.1 billion in charges related to the plan, $800 million to $1 billion of which is expected to be incurred during the fourth quarter of fiscal 2023, which is ongoing. The bulk of the total expected charges relate to employee transition, severance, employee benefits, or stock-based compensation.
The company anticipates that it will be done with the staffing elements of the restructuring plan by the end of fiscal 2024 and done with the real-estate efforts during fiscal 2026.
Shares of Salesforce were up about 2% in premarket trading Wednesday. The stock has fallen 46% over the past 12 months.