Salesforce cuts about 10% of its workforce

Ecommerce giant Amazon , and Salesforce are the latest U.S. technology firms to announce job cuts. They are reducing payrolls that grew rapidly during the pandemic lockdown.

Amazon said Wednesday that it will be cutting about 18,000 positions. This is the largest layoffs in the history of the Seattle-based company, but it only represents a fraction of its 1.5million global workforce.

“Amazon is a company that has survived difficult and uncertain economic times in the past and will continue to do so,” CEO Andy Jassy stated in a memo to employees, which was made public by the company. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

He said the layoffs will mostly impact the company’s brick-and-mortar stores, which include Amazon Fresh and Amazon Go, and its PXT organizations, which handle human resources and other functions.

In November, Jassy informed staff that layoffs were inevitable due to the changing economic landscape and the company’s rapid hiring over the past few years. Wednesday’s announcement contained job cuts that were not announced previously. The company also offered voluntary buyouts, and has been cutting costs elsewhere in its sprawling business.

Salesforce, meanwhile, said it is laying off about 8,000 employees, or 10% of its workforce.

The cuts announced Wednesday are by far the largest in the 23-year history of a San Francisco company founded by former Oracle executive Marc Benioff. Benioff was the first to lease software services to internet-connected devices. This is now called “cloud computing.” The layoffs follow a shakeup at Salesforce’s top ranks. Benioff’s hand-picked co-CEO Bret Taylor, who also was Twitter’s chairman at the time of its tortuous $44 billion sale to billionaire Elon Musk, left Salesforce. Stewart Butterfield, co-founder of Slack, left. Salesforce bought Slack two years ago for nearly $28 billion.

Salesforce workers who lose their jobs will receive nearly five months of pay, health insurance, career resources, and other benefits, according to the company. Amazon also said it offers job placement support, transitional insurance benefits, and a separation payment. Benioff is now the sole chief executive of Salesforce. He told employees in a written statement that he was responsible for the layoffs because he continued to hire aggressively during the pandemic. With millions of Americans working remotely and the demand for Salesforce’s technology growing, Benioff said that he had blamed himself. “As our revenue increased through the pandemic we hired too many people, leading to this economic downturn that we are now facing, and we take responsibility for that,” Benioff wrote.

Salesforce employed about 49,000 people in January 2020 just before the pandemic struck. Salesforce’s workforce today is still 50% larger than it was before the pandemic.

Meta Platforms CEO Mark Zuckerberg also acknowledged he misread the revenue gains that the owner of Facebook and Instagram was reaping during the pandemic when he announced in November that his company would by laying off 11,000 employees, or 13% of its workforce. Like other tech companies, Salesforce’s recent decline from the panic of the pandemic has had a significant impact on its stock price. Before Wednesday’s announcement, shares had plunged more 50% from their peak close to $310 in November 2021. The shares gained nearly 4% Wednesday to close at $139.59. This is a smart poker move from Benioff to preserve margins against an uncertain backdrop. The company clearly overbuilt its organization over the last few years, along with the rest in the tech sector. “A slowdown now in the horizon” wrote Dan Ives, Wedbush analyst.

Salesforce also said Wednesday that it will be closing some of its offices, but didn’t include locations. The company’s 61-story headquarters is a prominent feature of the San Francisco skyline and a symbol of tech’s importance to the city since its completion in 2018.