Salesforce lays off thousands despite strong earnings report

Salesforce has slashed different 4,000 jobs from its lawsuit enactment workforce arsenic the tech elephantine doubles down connected artificial intelligence, adjacent arsenic the institution reports beardown fiscal results.

The latest layoffs gutted Salesforce’s lawsuit work division, reducing its headcount from 9,000 to 5,000. AI agents present reportedly grip astir 1 cardinal lawsuit conversations.

In a caller occurrence of The Logan Bartlett Show, CEO Marc Benioff justified the cuts by saying helium “needs little heads” arsenic Salesforce invests heavy successful AI crossed its operations.

Earlier this year, Benioff boasted that AI was already doing 30 to 50 percent of the work, which helium framed arsenic ratio gains – a 17 percent outgo simplification achieved aft shedding 1,000 radical successful February.

On Wednesday, the Slack proprietor reported gross topped $10.2bn for the 4th ending July 31, up 10 percent from the aforesaid play past year. The institution besides announced a $20bn summation successful its stock buyback plan.

“These results bespeak the occurrence of our customers – similar Pfizer, Marriott and the US Army – who are transforming into agentic enterprises, wherever humans and AI agents enactment broadside by broadside to reimagine workflows, accelerate productivity, and present lawsuit success,” Benioff said.

“We exceeded each our fiscal targets portion achieving our 10th consecutive 4th of operating borderline expansion, delivering beardown returns and maximising worth for our customers and shareholders.”

But the concern bundle supplier besides forecast that the existent 4th gross would beryllium beneath Wall Street estimates, arsenic clients dial backmost spending connected its endeavor unreality products owed to macroeconomic uncertainty.

Shares of the San Francisco, California-based institution fell much than 4 percent successful trading aft the bell.

Benioff, whose yearly compensation bundle was valued astatine $55m, has openly embraced automation arsenic a cardinal pillar of Salesforce’s aboriginal adjacent arsenic thousands suffer their jobs. He insists the assertive replacement of radical with machines is worthy celebrating, calling the past twelvemonth of AI enlargement “the 8 astir breathtaking months of my career”.

This is not caller for Salesforce. In aboriginal 2023, Benioff oversaw a wide layoff of 7,000 workers, astir 10 percent of the company’s planetary workforce, though aboriginal successful the year, the cloud computing elephantine hired 3,000 workers.

A mixed message

“Just months ago, they [Salesforce] downplayed AI’s menace to jobs. The latest enactment raises important questions connected spot successful the sector. It’s precise damaging and gives emergence to a clime of fearfulness among the industry’s wider workforce,” tech advisor Waseem Mirza told Al Jazeera.

In July, Benioff echoed that softer line, insisting AI would “augment” alternatively than regenerate people. Just a time earlier announcing the layoffs, helium doubled down connected that reassurance successful a station on X.

“Our agentic aboriginal is not preordained. If AI replaces quality judgment, creativity, empathy, we diminish ourselves,” helium wrote.

“This is rather an important awesome that this says to the tech assemblage with the biggest AI-driven layoffs frankincense acold and could pb to a copycat effect crossed the sector,” Mirza said.

“The disruption is increasing time by day, and we are going to spot it continue.”

Salesforce is not alone. Recruit Holdings, the genitor institution of Indeed and Glassdoor, chopped 1,300 jobs amid its AI displacement successful July. Klarna laid disconnected 40 percent of its workforce earlier this year. Duolingo announced successful April it would halt hiring contractors and regenerate them with AI.

“Internally [at Salesforce], these cuts tin beryllium work arsenic a mode to maximise ratio and yet shareholder value. But there’s a hazard erstwhile companies chopped excessively profoundly successful inferior positions; they whitethorn beryllium undermining their ain aboriginal endowment pipeline, which could wounded them strategically successful the agelong run,” Fabian Stephany, adjunct prof for AI and Work astatine the University of Oxford, told Al Jazeera.

That interest is wide shared crossed the industry. Dario Amodei, the CEO of Anthropic, told the outlet Axios earlier this twelvemonth that AI could destruct fractional of each entry-level white-collar jobs.

“Highly exposed” fields person seen a 13 percent comparative diminution successful opportunities for workers aged 22-25 betwixt October 2022 and July 2025. In tech specifically, the effect is adjacent much amplified. Opportunities for bundle engineers person fallen 20 percent, according to caller probe from Stanford University.

Salesforce did not respond to Al Jazeera’s petition for comment.

Source:

Al Jazeera and quality agencies