Blaming pandemic boom, Salesforce reduces staff and real estate holdings

Dive Brief:

• Salesforce leadership announced on Wednesday that it will be laying off 10% of its approximately 80,000-strong workforce. CEO Marc Benioff cited a pandemic hiring boom — as well as more cautious client spending — as the reason for reductions in a Jan. 4 letter to Salesforce employees.
• “I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Benioff wrote.
• Per Salesforce’s U.S. Securities and Exchange Commission filing, also made on Jan. 4, layoffs are projected to be finished by the end of FY 2024.

Dive Insight:

Notably, Salesforce leadership also announced it will reduce its real-estate holdings on top of layoffs; HR Dive continues to report on the economy’s crunch of the housing industry and its workforce. 

Redfin’s layoffs announced November 2022 resulted in a 27% head count reduction. Additionally, the real estate company shut down its home-flipping service RedfinNow. A spokesperson for the company previously told HR Dive that the moves were necessary for Redfin to survive 2023’s continued economic downturn. 

In his internal letter, shared by the SEC, Redfin CEO Glenn Kelman also expressed regret, writing, “To every departing employee who put your faith in Redfin, thank you. I’m sorry that we don’t have enough sales to keep paying you.”

Salesforce joins Wells Fargo, JPMorgan Chase, Goldman Sachs and Morgan Stanley in slimming down its talent allocated to real estate and the housing market.