Salesforce to Lay Off 10% of Workforce
Workspan Daily
January 06, 2023

Salesforce is laying off 10% of its workforce and reducing its office space in certain markets, adding to the list of tech companies reducing staff in anticipation of a 2023 recession.  

CEO Marc Benioff said that the cuts come as many of the company’s customers are taking a more cautious approach to spending.  

“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions,” Benioff wrote in a letter to employees.  

Echoing the sentiment of other Silicon Valley tech leaders, Benioff took responsibility for overhiring and overspending amid the revenue surge from soaring demand the company experienced during the pandemic.  

Collectively, tech employers cut more than 150,000 jobs in 2022, the Wall Street Journal reported. Salesforce disclosed the restructuring plan on Wednesday in a filing with the Securities and Exchange Commission. It said it will incur about $1.4 billion to $2.1 billion in charges from the plan, with up to $1 billion in the company’s current quarter.  

Amazon Expected to Lay Off Over 18,000 Workers  

Amazon’s layoffs will affect more than 18,000 employees, the highest reduction tally revealed in the past year at a major technology company, the Wall Street Journal reported.  

The layoffs are concentrated in the e-commerce retailer’s corporate ranks and represents roughly 5% of that element of its workforce, and 1.2% of its overall tally of 1.5 million employees as of September.  

In November, Amazon said that it was beginning layoffs, with the cuts concentrated in its devices business, recruiting and retail operations. At the time, the Journal reported the cuts would total about 10,000 people. Thousands of those cuts started last year. 

The rest of the cuts will bring the total number of layoffs to more than 18,000 and will be made over the coming weeks. 

On Wednesday, after the Journal broke the news about the size of Amazon’s layoffs, CEO Andy Jassy addressed the cuts in a blog post.  

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy wrote. 

The blog post said the company would alert affected employees later this month. 

U.S. Economy Adds 223,000 Jobs in December 

The U.S. economy closed out 2022 by adding 223,000 jobs, providing signs of optimism ahead of lingering concerns of a recession.   

The Labor Department’s December jobs report also revealed the unemployment rate dropped to 3.5% from 3.6% in November. The DOL also revised November’s job figures upward to 256,000.  

In total, U.S. employers added 4.5 million jobs in 2022, the second-best year for job creation on record since 1940, according to the Wall Street Journal, behind only 2021 when 6.7 million jobs were added immediately following pandemic-induced shutdowns.  

Payrolls grew in leisure and hospitality, healthcare and construction, despite the sharp decline in home sales caused by higher mortgage rates. Employment declined slightly in the tech-heavy information sector and among couriers and messengers and warehouse and storage workers. 

Wage growth continued to cool as well to close out the year. Average hourly earnings rose 0.3% in December from the previous month, down from a 0.4% increase in November. They were up 4.6% from the previous year, down from a revised 4.8% gain in November and well below a March peak. 

Economists surveyed by The Wall Street Journal last fall saw a 63% probability of a U.S. recession in 2023. They also see the unemployment rate rising to 4.7% by December 2023. 

“We’ve obviously been in a situation over the past few months where employment growth has been holding up surprisingly well and is slowing very gradually,” Andrew Hunter, senior U.S. economist at Capital Economics told the Journal. “There are starting to be a few signs that we’re maybe starting to see a bit more of a sharp deterioration.” 

Video Game Workers Begin Union at Microsoft  

Organized labor claimed one of its biggest victories at a U.S. tech company on Tuesday, gaining a foothold among about 300 employees at a video game maker owned by Microsoft, the New York Times reported.  

The Communications Workers of America, which will represent the employees, announced the result, and Microsoft issued a statement recognizing the outcome. 

“We look forward to engaging in good faith negotiations as we work towards a collective bargaining agreement,” the company said. Microsoft has no other unionized workers. 

The unionization move at the video game maker, ZeniMax Media, which Microsoft acquired for about $7.5 billion in a deal that closed in 2021, did not involve a conventional union election run by the National Labor Relations Board, the Times reported.  

Instead, the company allowed workers to express their preferences in two ways: They could sign a union authorization card, which some began doing in November, or they could vote anonymously through an online platform that was open during most of December. 

The process was more efficient and less contentious than the run-up to a typical labor board election, which can involve extensive legal wrangling.

Microsoft agreed to remain neutral throughout the union campaign, avoiding the anti-union meetings and messaging that many companies engage in. The concessions came as the company has been trying to placate antitrust regulators who are scrutinizing its roughly $70 billion proposed acquisition of the video game maker Activision Blizzard. 

Those seeking to unionize at ZeniMax said that they hoped to change the company’s approach to promoting workers and to assigning them more responsibility, which they said seemed arbitrary at times, and that they hoped to be able to negotiate more flexible policies on remote work. 

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