E-commerce giant Amazon and business software maker Salesforce are the latest U.S. tech companies to announce major job cuts, slashing rapidly expanding labor costs during the pandemic lockdown.
Amazon said Wednesday it will cut about 18,000 positions. It’s the largest set of layoffs in the history of the Seattle-based company, but it’s a small fraction of its 1.5 million global workforce.
“Amazon has navigated uncertain and difficult economies in the past, and will continue to do so,” CEO Andy Jassy said in a memo to employees. published by the company. “These changes will help us pursue long-term opportunities with a stronger cost structure.”
The layoffs will primarily affect the company’s physical stores, including Amazon Fresh and Amazon Go, as well as the PXT organization, which handles human resources and other functions, he said.
In November, Jussie told employees that layoffs were coming. This is due to the economic climate over the past few years and the company’s rapid hiring. Wednesday’s announcement included previous job cuts that were not numbered. The company has also proposed voluntary acquisitions, cutting costs in other areas of its vast business.
Meanwhile, Salesforce said it would lay off about 8,000 employees, or 10% of its workforce.
The job cuts announced Wednesday are by far the biggest in the 23-year history of the San Francisco company founded by former Oracle executive Marc Benioff. Benioff pioneered the leasing of software services to Internet-connected devices, a concept now known as “cloud computing”.
Headcount reductions follow Salesforce’s top-ranking shifts. Benioff’s handpicked co-CEO Brett Taylor, who was also his Twitter chairman during his winding $44 billion sale to billionaire Elon Musk, has left Salesforce. Then Slack co-founder Stewart Butterfield left.Salesforce buys Slack It traded for around $28 billion two years ago.
Salesforce employees who lose their jobs will receive nearly five months of salary, health insurance, career resources, and other benefits, according to the company. Amazon said it also offers separation benefits, temporary health insurance benefits and job search assistance.
Benioff, currently the sole CEO of Salesforce, was laid off after continuing to actively recruit during a pandemic that has millions of Americans working from home and demand for the company’s technology soaring. He wrote to his employees that he was responsible for
“We hired too many people because the pandemic boosted our revenues, leading to this recession we’re facing now. I take responsibility for that,” Benioff said.
Salesforce employed approximately 49,000 people in January 2020, just before the pandemic hit. Today Salesforce has 50% more employees than he did pre-pandemic.
Meta Platforms CEO Mark Zuckerberg also admitted he misread the revenue growth Facebook and Instagram owners were getting during the pandemic when he announced in November that he would lay off 11,000 employees. . or 13% of its employees.
Like other major tech companies, Salesforce’s recent recovery from the days of the pandemic has taken a toll on the company’s stock price. Before Wednesday’s announcement, the stock had fallen more than 50% from its November 2021 peak of nearly $310. The stock rose nearly 4% on Wednesday to close at $139.59.
Wedbush analyst Dan Ives said: “Benioff is a smart poker move to maintain margins in uncertain times, and the company has clearly over-stretched its organization along with the rest of the tech sector over the past few years. We built and now the slowdown is imminent.” I have written.
Salesforce announced Wednesday that it will close some offices, but did not specify where. The company’s 61-story headquarters is a prominent feature of the San Francisco skyline and has become a symbol of the importance of technology to San Francisco since its completion in 2018.