Salesforce to cut global workforce by 10%

Cloud computing giant joins growing list of tech companies announcing layoffs

Wed, 04 Jan, 2023 - 17:40

Alan Healy

There are renewed fears for tech jobs in Ireland after cloud computing giant Salesforce said it planned to cut 10% of its global workforce.

The firm has a significant presence in Ireland. In 2019, it announced 1,500 new roles in Dublin, with plans to expand the company’s Irish workforce to 3,000 over the next five years. The company is also creating a 430,000sq ft campus in Dublin’s Silicon Docks, being built by developer Johnny Ronan.

However, in a letter to staff on Wednesday, the company's co-chief executive officer Marc Benioff said the current economic environment remains challenging.

"Our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10%, mostly over the coming weeks," he said.

Deep downturn

Companies from Meta to Amazon.com have in the past year shrunk their employee base to prepare for a deep downturn as global central banks have aggressively raised interest rates to tame stubbornly high inflation.

Businesses that relied on cloud services during the pandemic are now trying to reduce expenses through job cuts or delaying new projects, hurting companies such as Salesforce and Microsoft.

Globally, Salesforce had 73,541 employees at the end of January last year, a 30% jump from 2021.

The company's growth has slowed during the past four quarters, posting its weakest revenue increase in the third quarter.

Companies are required by law to give 30-day notification to the Minister for Enterprise Trade and Employment before making any staff redundant. A spokesperson for the new Minister Simon Coveney told the Irish Examiner they had not received any collective redundancy notification in relation to potential redundancies at Salesforce.

The move by Salesforce follows a slew of job cut announcements by major tech firms late last year that included Meta, Twitter, and Stripe.

Ireland 'not immune'

Just yesterday, Taoiseach Leo Varadkar said Ireland cannot be immune from the slump in the technology sector.

He said the Government had not been given early notification of further digital job losses in the sector here but said the situation was being monitored closely.

“Obviously, the tech sector is downsizing internationally, we're not going to be immune from that here,” said Mr Varadkar.

“When it comes to tech companies, we are monitoring the situation very closely, we don't have any early warnings at the moment of digital job losses. There have been a number [of announcements] in the past couple of months."

He said a slightly more positive picture had emerged in the few weeks before Christmas than would have been the case six or 12 weeks ago.

“I know a lot of tech companies that are still recruiting, and that's very positive as well. But it's a situation that we'll obviously be keeping under review,” he added.