Salesforce and Amazon have announced major downsizings, cutting around 25,000 jobs combined.
Salesforce will begin laying off around 10% of its workforce, which is more than 7,000 employees, the company announced Wednesday. The CRM giant is also planning on cutting office space with the aim of reducing costs.
At the end of October last year, Salesforce employed just under 80,000 people, which is 48,000 more than three years before.
The pandemic and the current economic headwinds are the main causes of 'overhiring' and now downsizing. The same said Marc Benioff, Salesforce's co-CEO, in a company statement:
"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."
“The environment remains challenging, and our customers are taking a more measured approach to their purchasing decisions,” added Benioff.
In November, Salesforce cut around 1,000 positions as the company saw decreased demand for its products and services. Later that month, Bret Taylor announced his plan to step down as co-CEO on January 31, leaving Marc Benioff at the top of the company.
Amazon follows suit
The biggest layoff wave in the tech industry will be the one by Amazon as the company prepares to cut more than 18,000 jobs.
Some job cuts began last November when the company first announced layoffs. The affected departments include devices business, recruiting, and retail operations. The company's CEO, Andy Jassy, addressed the layoffs in a blog post, trying to evoke positive sentiments:
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles. Companies that last a long time go through different phases."
To put the numbers into perspective,18,000 roles represent just over 1% of the 1.5 million Amazon workforce, both in warehouses and corporate offices.