Cloud computing: SAP competitor Salesforce is cutting thousands of jobs

cloud computing
SAP competitor Salesforce is cutting thousands of jobs

The cloud software provider Salesforce wants to lay off every tenth employee to cut costs. photo

© Stefan Sauer/dpa-Zentralbild/dpa

In November, the SAP competitor disappointed investors with its forecasts. Now every tenth employee is to leave. Salesforce isn’t the only tech company suffering from cost pressures.

The US software manufacturer Salesforce wants to get rid of around every tenth employee in the difficult business environment. The rival of the Dax group SAP announced on Wednesday a restructuring to reduce costs, as part of which jobs are to be cut and office space is to be given up. According to its own information from December, the company most recently had more than 79,000 employees worldwide. This means that almost 8,000 jobs are likely to be lost at the sales software specialist.

Company boss and co-founder Marc Benioff explained the step in a letter to the workforce, among other things, that the company’s customers are currently taking a closer look before making any purchasing decisions. According to him, most of the affected jobs will be eliminated in the coming weeks. Benioff wrote that he takes responsibility for the fact that the company, which has been doing well in the corona pandemic, hired too many people in the current downturn.

Before the planned savings come into play, management expects costs of around 1.4 billion to 2.1 billion US dollars (1.33 billion to 1.99 billion euros). Of this, USD 0.8 billion to USD 1.0 billion was attributable to the final quarter of the 2022/23 financial year, which runs until the end of January.

Disappointing view

Salesforce only disappointed investors with its outlook for the final quarter at the end of November. In addition, the group announced at the time that co-CEO Bret Taylor would be leaving his post at the end of January.

Most recently, many US tech companies had announced major job cuts to cut costs, including Twitter, Amazon and Facebook’s parent company Meta Platforms.

Salesforce competes with SAP primarily in the area of ​​business management software. While Salesforce once grew as a pure cloud provider for sales teams and customer contact, the company has now expanded its range significantly through acquisitions, including the takeover of the office messenger service Slack.

At the beginning of last year, SAP boss Christian Klein ordered the Walldorf-based Dax group to switch more quickly to offers for use from the network (cloud) with new product bundles – also in order to be able to keep up with Salesforce. The subscription models from the cloud have now become the standard in the software industry, and managers expect more growth from them – and thus greater attractiveness for investors. SAP is also making savings and is currently only hiring at a slower pace.

dpa

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