Salesforce To Cut 700 Jobs Across Divisions In Restructuring Move

Salesforce, a cloud computing company on Friday revealed that it will be laying off over 700 people across multiple divisions, making it the latest victim of the ongoing downsizing in the IT industry. This follows a rough 2023 in which the business battled a post-pandemic slump and mounting investor pressure.

The current round of layoffs follows a much larger one in 2023 when Salesforce let go of around 10 per cent of its workforce, roughly 7,000 employees. Despite the smaller scale this time, the move further cements the company's place alongside other tech giants like Google, Twitch and Amazon who have all implemented workforce reductions in 2024.

Sundar Pichai, the CEO of Google, acknowledged the necessity of difficult decisions to seize the significant opportunities ahead, following the company's recent decision to lay off 12,000 employees. This move aligns with the likely pressure faced by Marc Benioff, CEO of Salesforce from investors seeking increased profitability.

Further, Salesforce's challenges began in 2023 with slowing sales figures attributed to the post-pandemic economic climate. This attracted the attention of major investors like Elliot Management, who urged the company to prioritise faster margin growth. In response, Salesforce initiated a series of cost-cutting measures, including the 2023 layoffs and reductions in real estate and travel expenses.

Saleforce's action implies that these initiatives might not be sufficient to allay investor fears or deal with internal corporate issues. It's unclear if these are the company's final restructuring efforts or if more changes are imminent given the ongoing unpredictability in the IT sector.