Salesforce is preparing for a major round of layoffs that could affect as many as 2,500 workers across the software vendor, Protocol has learned, in a bid to cut costs amid a new activist investor challenge and harsh economic conditions.
The company plans to lay off a large number of individuals, roughly 2,000 people or more, for "performance" issues, according to both an industry source and a former employee. Several hundred more, likely those workers who fall under a protected group like individuals with disabilities, will be placed on a 30-day review, with the intention of letting them go once that concludes, according to one source. It was unclear when the layoffs would begin, the sources added, as discussions on the plan remain ongoing. However, they are likely to happen before the Thanksgiving holiday.
Salesforce spokesperson Carolyn Guss did not respond to repeated requests for comments. Chief people officer Brent Hyder and chief equality officer Lori Castillo Martinez also did not respond to request for comment. However, in statements provided to other news outlets following publication, Salesforce confirmed it eliminated hundreds of jobs on Monday.
When Salesforce underwent layoffs in August 2020, it provided 60 days' notice and severance, including placement services and a few months of benefits to affected employees. If the company is taking the stance that workers are being let go for under-performance, it's unclear if it would extend the same type of package.
Investors are increasingly demanding a greater return from Salesforce, which has always funneled its profits toward growth, including spending billions to acquire companies like Slack and Tableau. The company is also now facing pressure from activist investor Starboard, which recently disclosed a "significant" but still unknown stake in Salesforce.
Salesforce previously laid off roughly 90 contract workers and implemented a hiring freeze through January 2023. At the time, a spokesperson said that "limited hiring continues" but that "most departments have reached their hiring goals for the fiscal year."