Salesforce cuts 700 jobs as downsizing continues in tech industry
Cloud-based software giant Salesforce is set to lay off nearly 700 employees, per The Wall Street Journal. This move affects nearly 1% of the company's global workforce. Early last year, the firm had fired approximately 8,000 employees, in response to investor demands to trim expenses. Since the start of 2024, Amazon, Google, Microsoft, eBay, and other tech firms have announced fresh round of layoffs as the tech industry continues to aim for profitability.
Job cuts due to workforce adjustments
Salesforce is the latest firm to downsize its workforce and its latest layoff round might be aimed at redirecting the company's expenditures toward growth. However, as per WSJ, Salesforce currently has around 1,000 job openings across the company. This suggests that the current layoff decision may also be a standard workforce adjustment rather than a major strategy shift.
Salesforce introduced various measures to boost profit margins
Salesforce has faced several challenges due to a post-pandemic decline in sales, adversely impacting its growth. Activist investors, including Elliott Management, acquired stakes in the company, urging Salesforce CEO Marc Benioff to accelerate the improvement of the company's margins beyond its initial plans. To comply with these demands, the company implemented measures such as workforce reductions and cost-cutting in areas like employee travel, real estate, and retreats.
Performance remains phenomenal despite challenges
Despite obstacles, the company's stock surged by nearly 80% in the past 12 months, surpassing the 37% increase in the NASDAQ Composite Index. The company witnessed a rise in revenue during the second and third quarters and subsequently raised its annual profit forecast. This impressive performance is attributed to enhanced profit margins and overall improvements. Salesforce is anticipated to announce the earning of the last quarter in March.
