Salesforce discloses plans to ax more than 700 Bay Area tech workers

Salesforce has revealed plans to jettison well over 700 workers in the Bay Area, marking one of the largest rounds of layoffs yet for the region’s woozy tech sector, according to a new filing with state labor officials.

The layoffs that Salesforce has begun to orchestrate are slated to occur in San Francisco, the company stated in a WARN notice that it has sent to the state Employment Development Department.

San Francisco-based Salesforce intends to eliminate 752 jobs, all in its headquarters city, the company told the EDD.

“It is anticipated that the terminations will be permanent and will commence effective March 24, 2023,” Salesforce said in the WARN notice.

Salesforce notified all of the affected employees on or around Jan. 4 of this week that the company had decided to terminate their jobs, the tech firm told the EDD.

An array of high-profile tech and biotech companies have revealed plans to chop jobs in the Bay Area in recent months and this year.

Among these companies: Facebook app owner Meta Platforms, Twitter, Cepheid and Cisco Systems.

“There are no bumping rights in existence, nor are there any unions representing the affected employees,” Brent Hyder, Salesforce president and chief people officer, stated in the WARN letter.

On Jan. 4, Salesforce announced that it had decided to chop 10% of its workforce. The notice came in a regulatory filing and in a letter to employees from the company’s chief executive officer.

Salesforce’s decision to conduct job cuts is an indication that the tech and biotech layoffs that haunted the Bay Area employment sector during the final three months of 2022 have yet to run their course.

“We’ve made the very difficult decision to reduce our workforce by about 10%,” Salesforce CEO Mark Benioff wrote in the letter to the company’s employees.

This means that potentially 7,000 or more Salesforce workers could be losing their jobs, based on information the company had previously provided to the Securities and Exchange Commission.

San Francisco-based Salesforce, as of January 2022, employed 73,541 workers worldwide, the company stated in an SEC filing in early 2022.

This means that the termination of 752 Salesforce jobs in San Francisco represents at least 10% of the potential job losses worldwide.

In January 2022, Salesforce employed roughly 40,400 people in the United States and another 33,100 outside of this country.

If the job cuts of 10% of the workforce are distributed evenly, that could mean a loss of 4,000 jobs in the U.S. and another 3,300 jobs outside of the United States.

That would then mean that the Salesforce job cuts in the Bay Area that have been revealed to this point would equate to potentially 19% of all the jobs expected to be eliminated in the United States.

The company’s top boss acknowledged that Salesforce erred by hiring workers too quickly in the wake of fevered demand by businesses and consumers for tech services and products during the coronavirus outbreak and the resulting COVID-linked lockdowns and work-from-home trends.

Salesforce miscalculated what might be the demand for its products and services once the coronavirus impacts began to ebb, Benioff said in the message, which amounted to a mea culpa.

“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing,” Benioff said. “I take responsibility for that.”

It’s also possible that Salesforce could jettison some of its office space, the company warned in the SEC filing.

“Select real estate exits and office space reductions within certain markets” are anticipated, Salesforce said in the regulatory documents filed with the Securities and Exchange Commission.

The staffing reductions are expected to be largely complete by January 2024, marking the end of the Salesforce fiscal year. The real estate exits should be complete by January 2026.

“The employees being affected aren’t just colleagues,” Benioff stated in the letter to employees. “They’re friends. They’re family. Please reach out to them.”