Salesforce plans to cut thousands of jobs as the economic slowdown begins to dampen cloud spending growth.
Protocol reported that a San Francisco-based company is preparing for layoffs that could affect up to 2,500 workers. It was not clear when the layoffs would begin as discussions on the plan are still ongoing. However, it is likely to occur before the Thanksgiving holiday, the publication said, citing an industry source and a former employee.
The company told CNBC earlier this week that it had recently let some employees go. “Our sales performance process leads to accountability. Unfortunately, this can result in some leaving the business, and we support them during their transition,” a company spokesperson said in a statement.
In May, Salesforce slowed hiring and halted hiring for some open roles to control expenses, according to an internal memo obtained by the site. Recently, an active investor Starboard acquired a stake in Salesforce and pressured the company to improve margins.
Salesforce stock has fallen more than 50% in the past year. The company’s headcount increased from 57,000 to more than 73,000 in 2021, according to its annual reports. That was partly driven by a series of expensive acquisitions in recent years, including the $27.7 billion purchase of Slack, which closed last July. Investors now want the company to focus on profits, and to a lesser extent on growth.