Salesforce Inc. shares gained over 3% at the open on Wednesday after the cloud-based software company said it would reduce its workforce by 10% and close certain offices.
According to a regulatory filing, the company expects these cost-cutting measures to lead to about $1.4 billion to $2.1 billion in charges, with $800 million to $1 billion to be recorded in 4Q fiscal 2023.
In a letter to employees, Salesforce co-CEO Marc Benioff said as the company’s revenue accelerated during the pandemic, it “hired too many people leading into this economic downturn we’re now facing.”
READ: Salesforce at post-Covid low following series of management exits
“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” he wrote.
The letter said affected employees in the United States will receive a minimum of about five months of pay, health insurance, career resources, and other benefits, with those outside the US to receive similar support aligned with their local employment laws.
Salesforce shares were trading up 3.5% at US$139.53 on Wednesday morning after losing almost half of their value in 2022.
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