Salesforce said on Wednesday it would lay off about 10% of its employees and close some offices as a part of its restructuring plan, becoming the latest company to undertake cost cuts in a challenging economy.
The cloud-based software company’s actions follow that of IT consulting firm Accenture, which last month warned about slowdown in its consulting business as clients were postponing business improvement projects, especially in retail.
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“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Co-Chief Executive Officer Marc Benioff said in a letter to employees.
“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.”
Salesforce expects to incur about $1.4 billion to $2.1 billion in charges, of which about $800 million to $1 billion will be recorded in the fourth quarter of fiscal 2023.
Shares of Salesforce, which rose 2% before the bell on Wednesday, nearly halved in value last year amid a broad selloff in tech stocks sparked by rising interest rates and fears of a possible U.S. recession.
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