Salesforce is laying off 10 percent of employees and reducing office space

Salesforce, the business software giant, said on Wednesday it plans to lay off 10 percent of its workforce, or about 8,000 employees, and cut back on office space due to concerns about the economy.

“The environment continues to be challenging, and our customers are taking a more informed approach to their purchasing decisions,” said Marc Benioff, co-CEO of the company, he said in a note to staff Announcing discounts.

Salesforce’s revenue, like many other tech companies’, has boomed during the pandemic as more people around the world worked from home and relied more on technology to collaborate with remote colleagues. In his letter, Mr. Benioff noted that the company had hired aggressively during that time.

Salesforce employed just under 80,000 people at the end of October, up from about 48,000 three years ago.

“We hired a lot of people which led to this economic downturn that we’re in right now, and I take responsibility for that,” said Mr Benioff.

A Salesforce spokeswoman said the company had no further comment on the cuts.

The layoffs have tempered a slowdown in the tech industry. In recent months, tech giants like Amazon have slowed hiring and cut jobs, while smaller companies like Lyft and Stripe have also announced Layoffs. Several major companies in the industry reported financial results indicating that they were feeling the effects of higher inflation and higher interest rates.

Social media companies have suffered a downturn in digital advertising in particular. metaInc., which owns Facebook and Instagram, cut 13 percent of its staff in November and said its headcount will remain “roughly flat” through the end of this year. popSnapchat’s parent company laid off 20 percent of its employees in August, blaming difficult macroeconomic conditions. Elon Musk, who bought Twitter for $44 billion in October, has cut the company’s workforce by more than half.

Salesforce sales grew 14 percent last quarter, the slowest pace in years. And I expected slower growth in the current quarter. Other tech chiefs, like Meta Mark Zuckerberg, have recently admitted to hiring too many people like them. Rushed to make cuts. More than 150,000 tech workers were laid off last year, according to layoffs.fyi, a website that tracks job cuts.

In November, Salesforce Co-CEO Brett Taylor announced that he was stepping down from his position and leaving at the end of this month. In December, Stewart Butterfield, CEO of Slack, a workplace communications platform owned by Salesforce, said he would be leaving his position by the end of this month. Salesforce bought Slack for $27.7 billion in 2020.

Salesforce is San Francisco’s largest private employer, and its main office building is The tallest in the city.

The company estimated that the changes would cost up to $2.1 billion. Mr. Benioff said Salesforce offers U.S. employees a minimum of five months’ pay, as well as health insurance and job resources. He wrote that most of the cuts would take place “in the coming weeks.”

Salesforce shares rose 3 percent in trading on Wednesday. The company’s share price has fallen about 50 percent in the past year.