Salesforce cuts every tenth job – and the stock market rejoices

NAfter American corporations such as Cisco, Amazon, HP and Meta had already announced the elimination of tens of thousands of jobs around the world, the ambitious software house Salesforce is now joining this illustrious group. The SAP competitor, platform and cloud specialist from San Francisco, wants to cut every tenth of its almost 80,000 jobs in the difficult market environment over the coming weeks. The blue letters should be delivered to those affected within hours, the company announced on Wednesday. In addition, entire locations of the group are to be closed and idle office space is to be returned.

The stock market reacted with delight to this news. The price of the share on the European stock exchanges rose almost 4 percent to around 140 euros on Wednesday. A year ago, her rate was 220 euros. Before the savings planned with the layoffs take effect, there will first be costs for the associated severance payments and shutdowns, among other things. The board around the co-CEO and co-founder Marc Benioff expects 1.4 to 2.1 billion dollars here.

Salesforce had already issued an initial warning in November and was still disappointing its investors at the time. The outlook for the final quarter of the current fiscal year was significantly worse than Wall Street had previously expected. In addition, the group announced in the fall that the previous co-CEO Bret Taylor would be leaving his post at the end of January and hundreds of jobs in the company’s sales departments would be cut. Benioff is now quoted as saying that the skyrocketing demand for software, cloud and platform services during the corona pandemic gave an overly optimistic picture of the situation and that Salesforce therefore hired too many new employees.

Over the past few years, the number of employees in the group has almost tripled. Mainly through dozens of acquisitions of smaller competitors and the previously flourishing cloud computing business. Now, however, difficult economic times are emerging, according to Benioffs. Therefore, numerous positions have to be deleted. “I take responsibility for it.” The laid-off workers will continue to receive their usual salary for at least five months, enjoy the protection of health insurance for the same period and receive help with their further life and career planning. Salesforce is San Francisco’s largest private employer.