AP

Amazon, Salesforce jettison jobs in latest tech worker purge

Jan 5, 2023, 6:44 AM | Updated: 3:37 pm

FILE - In this Thursday, May 16, 2019, file photo, Salesforce chairman Marc Benioff speaks during a...

FILE - In this Thursday, May 16, 2019, file photo, Salesforce chairman Marc Benioff speaks during a news conference, in Indianapolis. Salesforce is laying off about 10% of its workforce, more than 7,350 employees, the latest job cuts in the tech industry as corporations cut back on software and other spending. The San Francisco cloud computing software company will also be closing some offices, according to a regulatory filing Wednesday, Jan. 4, 2023. (AP Photo/Darron Cummings, File)

(AP Photo/Darron Cummings, File)

E-commerce giant Amazon and business software maker Salesforce are the latest U.S. technology companies to announce major job cuts as they prune payrolls that rapidly expanded during the pandemic lockdown.

Amazon said Wednesday that it will be cutting about 18,000 positions. It’s the largest set of layoffs in the Seattle-based company’s history, although just a fraction of its 1.5 million global workforce.

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” CEO Andy Jassy said in a note to employees that the company made public. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

He said the layoffs will mostly impact the company’s Amazon Stores division — which a spokesman said encompasses its e-commerce business as well as company’s brick-and-mortar stores such as Amazon Fresh and Amazon Go — and its PXT organizations, which handle human resources and other functions.

In November, Jassy told staff that layoffs were coming due to the economic landscape and the company’s rapid hiring in the last several years. Wednesday’s announcement included earlier job cuts that had not been numbered. The company had also offered voluntary buyouts and has been cutting costs in other areas of its sprawling business.

Salesforce, meanwhile, said it is laying off about 8,000 employees, or 10% of its workforce.

The cuts announced Wednesday are by far the largest in the 23-year history of a San Francisco company founded by former Oracle executive Marc Benioff. Benioff pioneered the method of leasing software services to internet-connected devices — a concept now known as “cloud computing.”

The layoffs are being made on the heels of a shake-up in Salesforce’s top ranks. Benioff’s hand-picked co-CEO Bret Taylor, who also was Twitter’s chairman at the time of its tortuous $44 billion sale to billionaire Elon Musk, left Salesforce. Then, Slack co-founder Stewart Butterfield left. Salesforce bought Slack two years ago for nearly $28 billion.

Salesforce workers who lose their jobs will receive nearly five months of pay, health insurance, career resources, and other benefits, according to the company. Amazon said it is also offering a separation payment, transitional health insurance benefits, and job placement support.

Benioff, now the sole chief executive at Salesforce, told employees in a letter that he blamed himself for the layoffs after continuing to hire aggressively into the pandemic, with millions of Americans working from home and demand for the company’s technology surging.

“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,” Benioff wrote.

Salesforce employed about 49,000 people in January 2020 just before the pandemic struck. Salesforce’s workforce today is still 50% larger than it was before the pandemic.

Meta Platforms CEO Mark Zuckerberg also acknowledged he misread the revenue gains that the owner of Facebook and Instagram was reaping during the pandemic when he announced in November that his company would by laying off 11,000 employees, or 13% of its workforce.

Like other major tech companies, Salesforce’s recent comedown from the heady days of the pandemic have taken a major toll on its stock. Before Wednesday’s announcement, shares had plunged more 50% from their peak close to $310 in November 2021. The shares gained nearly 4% Wednesday to close at $139.59.

“This is a smart poker move by Benioff to preserve margins in an uncertain backdrop as the company clearly overbuilt out its organization over the past few years along with the rest of the tech sector with a slowdown now on the horizon,” Wedbush analyst Dan Ives wrote.

Salesforce also said Wednesday that it will be closing some of its offices, but didn’t include locations. The company’s 61-story headquarters is a prominent feature of the San Francisco skyline and a symbol of tech’s importance to the city since its completion in 2018.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Image: A cargo ship is stuck under the part of the structure of the Francis Scott Key Bridge after ...

Associated Press

Authorities identify 2 bodies recovered at site of Baltimore bridge collapse

A major bridge in Baltimore snapped and collapsed after a container ship rammed into it early Tuesday, and several vehicles fell into the river below.

12 hours ago

Photo: Mountaineer Jim Whittaker has died at 95....

Gene Johnson, The Associated Press

Lou Whittaker, among the most famous American mountaineers, has died at age 95

Lou Whittaker, a legendary American mountaineer who helped lead ascents of Mount Everest, K2 and Denali, has died at age 95.

12 hours ago

File photo: Former Sen. Joe Lieberman speaks in Washington on Jan. 18, 2024....

Associated Press

Former Sen. Joe Lieberman, Democrats’ VP pick in 2000, dead at 82

Former U.S. Sen. Joe Lieberman of Connecticut, who nearly won the vice presidency on the Democratic ticket with Al Gore in 2000, has died.

12 hours ago

islamic state attack...

Vanessa Gera, The Associated Press

What we know after the Islamic State group claims responsibility for Moscow massacre

The Islamic State group has claimed responsibility for an attack on a suburban Moscow concert hall that killed at least 133 people.

4 days ago

Moscow shooting...

The Associated Press

Russia: 60 dead, 145 injured in concert hall raid; Islamic State group claims responsibility

Assailants burst into a concert hall in Moscow on Friday and sprayed the crowd with gunfire, killing over 60 people, injuring more than 100.

6 days ago

Photo: Britain's Kate, Duchess of Cambridge visits 282 (East Ham) Squadron, RAF Air Cadets, Cornwel...

Associated Press

Kate Middleton announces she has cancer, is undergoing chemotherapy

Kate Middleton, Princess of Wales, says she is undergoing chemotherapy to treat cancer. She has been out of view since Christmas.

6 days ago

Amazon, Salesforce jettison jobs in latest tech worker purge