Startups

Salesforce’s Second Round Of Layoffs Is An Uncommon Sight


Looks like Salesforce is kicking off high-profile tech layoffs in 2023.

Layoff news quelled in the weeks leading up to the winter holidays. But it only took four days into the new year for the enterprise cloud platform to announce it will lay off around 10% of its staff in the coming weeks. This comes after spending two years of overhiring, like many other tech companies.

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“I’ve been thinking a lot about how we came to this moment,” CEO Marc Benioff said in a letter to employees. “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.”

Salesforce1 cited having more than 7,900 employees globally back in February, and previously laid off 1,090 workers back in November, per Crunchbase layoffs data. A 10% layoff amounts to roughly 680 workers affected by the news.

Major party foul

If you asked me which U.S.-based company would announce layoffs early on in 2023, I wouldn’t have picked the publicly traded enterprise platform that already went through an employee cut in November. In a previous story I noted these sweeping mass layoffs from large tech companies are a good sign there would be no future layoffs from that company. Salesforce, however, conducted two rounds in the span of two months.

A company conducting multiple rounds of layoffs is already a bit of a rarity. According to Crunchbase data, around 9% of the 433 tech companies we tracked laid people off more than once through 2022.

Nolan Church, CEO of consulting firm Continuum (who headed up the talent teams at Carta and DoorDash) called multiple layoffs “a gigantic management failure.”

“If I am an employee in a company that’s going through multiple rounds of layoffs unexpectedly, I’m losing faith in the business and I’m living in fear,” Church said.

Multiple rounds of layoffs often happen at smaller startups, not large tech firms helmed by seasoned executives managing tens of thousands employees globally. Around 65% of tech companies that conducted a second or third round of layoffs were private startups. The rest were only a handful of publicly traded companies such as Lyft, Beyond Meat and Netflix, which undertook more than two layoffs over the span of the year.

Illustration: Dom Guzman

 


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