As part of its reorganization plan, Salesforce announced on Wednesday that it would close several offices and lay off around 10% of its workforce, making it the newest business to implement cost-cutting measures in a struggling economy.
The vendor of cloud software is imitating IT consulting firm Accenture, which last month warned about a downturn in its consulting business due to clients deferring business improvement projects, particularly in the retail sector.
Co-Chief Executive Officer Marc Benioff wrote in a message to staff, “The environment remains tough and our customers are adopting a more careful approach to their purchasing decisions.
I accept responsibility for hiring excess staff before the current economic slump because our revenue increased due to the epidemic.
Salesforce anticipates costs of between $1.4 billion and $2.1 billion, of which between $800 million and $1 billion would be tallied in the final quarter of the company’s fiscal 2023.
Salesforce’s stock worth nearly halved last year amid a widespread selloff in IT companies brought on by rising interest rates and concerns about a potential U.S. recession. Shares of Salesforce increased 2% before the bell on Wednesday.