Salesforce Inc. will lay off 10% of its workforce in an effort to reduce operating expenses, the firm said in a Wednesday filing with the Securities and Exchange Commission (SEC).
In addition, the tech giant is planning “select real estate exits and office space reductions within certain markets,” it said.
The company planned to notify affected employees by email, to be followed by engagement by leadership, co-CEO Marc Benioff said in a letter to the staff.
The move will affect roughly 8,000 employees, according to outside estimates.
“I’ve been thinking a lot about how we came to this moment,” Benioff said. “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 approximately $1.4 billion to $2.1 billion in charges in connection with the plan. Of that, roughly $800 million to $1.0 billion will hit in the fourth quarter of fiscal 2023.
The bulk of this will be $1.0 billion to $1.4 billion in charges related to employee transition, severance payments and benefits. In addition, the firm will incur $450 million to $650 million in exit charges caused by the office space reductions.
Of the aggregate amount of charges the company estimates it will incur in connection with the plan, Salesforce expects approximately $1.2 billion to $1.7 billion will be in future cash expenditures.
The company, which provides the email service Pardot, among many other things, expects the employee-related actions will be completed by the end of its fiscal 2024. The real-estate restructuring will be done by fiscal 2026.