Cloud computing giant Salesforce on January 4, 2023, said it was shedding about 10 percent of its employees, or just under 8,000 jobs, and closing several offices. With the plan, Salesforce joins other US tech giants including Facebook-owner Meta, Twitter and Amazon that have also imposed job cuts as the world economy heads into a downturn. (Photo by Josh Edelson / AFP)

Salesforce to lay off 10% of workforce as Amazon slashes more jobs

Tech layoffs dominated headlines around the world in the last quarter of 2022. Some of the biggest tech companies, including Amazon, Twitter, Meta, and others announced job cuts globally as they look to prepare for economic uncertainties in 2023.

The layoffs in 2022 affected employees all around the world. In Southeast Asia, tech unicorns that profited during the pandemic also reduced their workforce and spending, fearing the future.

Amazon, which initially announced up to 10,000 job cuts in 2022 is now most likely to slash more jobs. According to a report by Bloomberg, up to 18,000 employees could end up losing their jobs. Citing a memo by Andy Jassy, CEO of Amazon, the announcement of additional job cuts will be followed by the company’s annual planning process.

The report also states that the staff reduction will be focusing mostly on the company’s corporate ranks which include its retail division and human resources functions like recruiting.

“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,” stated Jassy.

The increased layoffs come at an interesting time, given Amazon’s huge spending on its Re:Invent event in December. If the company knew that it would be facing uncertainties, perhaps it could have scaled down a lot more on its physical event.

Amazon investors gave a positive reaction to the latest belt-tightening efforts, betting it may bolster profits at the e-commerce company. The shares climbed nearly 2% in late trading after the Wall Street Journal first reported on the plan. Despite the job cuts, Amazon still has about 1.5 million employees globally as of September.

Amazon was also not the only company announcing layoffs at the start of the new year. Salesforce has also announced that it plans to reduce its workforce by 10% and close some of its offices. The cloud-based software firm went on a hiring spree during the pandemic and now finds itself with an overloaded workforce, given the economic uncertainties of 2023.

According to a report by Reuters, the job cuts would lead to about US$1.4 billion to US$2.1 billion in charges, while only about US$800 million to US$1 billion will be recorded in the fourth quarter.

In a letter to employees, Salesforce co-CEO Marc Benioff stated that the environment remains challenging and that customers are taking a more measured approach to their purchasing decisions.

“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,” stated Benioff.

Salesforce had nearly 80,000 employees at the end of the third quarter, up from about 70,000 a year earlier. The company also has a large presence in Southeast Asia with its Asia Pacific regional office located in Singapore. It remains to be seen if the job cuts will impact employees in Asia Pacific as well.

With 2023 just kicking off, it seems the layoff from 2022 is expected to continue. For now, the tech industry will be at its most vulnerable stage, ensuring they take the right steps in their spending and investments. While layoffs are normally the most direct approach to controlling finances and preparing for uncertainties, the reality is, the tech industry has to be prepared for the worst outcomes possible.