In a message to staff early on Wednesday morning, Salesforce CEO Marc Benioff announced the company will lay off 10% of its staff over the coming weeks. Salesforce stock rose more than 3% on the news in intraday trading.
Earlier this month, Benioff signaled changes to the organization when he told employees that staffers hired during the pandemic have not been as productive as previous generations of workers. This came after the abrupt resignation of the firm’s co-CEO Bret Taylor as well as news of two other major impending departures: Stewart Butterfield, CEO of the chat service subsidiary Slack, and Mark Nelson, the CEO of Tableau Software, a data visualization company also owned by Salesforce. Butterfield wrote a lengthy message to Slack staff today addressing the news, as he serves out a transition period before he also leaves the company.
“The market shifts we’re going through right now are generational in magnitude and economic conditions today are such that we would be in the same position if we were still an independent company,” Butterfield wrote in the message, which was reviewed by Fortune. “It likely would have meant deeper cuts, executed even earlier, given how much more brittle life as a mid-cap SaaS company has been for others. That’s what we’ve seen at companies like Stripe, Shopify, Docusign, Twillio etc., along with the tech giants like Amazon, Meta and Google.”
Butterfield hinted at such struggles when he sent a message about his own departure in early December, saying there will be “challenges ahead” and the company is “at a time with an unusual amount of economic uncertainty.”
“Though this week will be hard and these changes very painful, what gives me optimism is how much isn’t changing,” Butterfield wrote in his message to staff today. “This is a tough week as we say goodbye to a number of our talented colleagues. I’m grateful to them; I’m grateful to all of you and I feel confident that together we can navigate our way through this. As always, empathy, courtesy and solidarity are fundamental at Slack and we’re here to support you.”
In his message, Butterfield also pointed out Slack’s rapid growth over the pandemic. At the time of its acquisition by Salesforce in December 2020, the company had roughly 2,600 employees. After layoffs, Butterfield noted, Slack will still have a whopping 3,500 employees.
A Slack employee told Fortune that many employees are frustrated that the layoffs are being stretched out over weeks, but there’s an all-hands meeting scheduled tomorrow where staff will likely get more answers: “From what it sounds like even director-level people were blindsided.”
Butterfield continued: “There is some comfort in the fact that we’re still in a position to be relatively generous to the people who are being notified today. A longer than usual paid notice-period allowing people to hit stock vesting cliffs and have bonuses paid along with additional severance will make the transition easier. That’s appropriate because our departing Slack colleagues didn’t do anything wrong. That’s not what this is about. They deserve our gratitude and support just as much as all of you.”
Benioff sent a Slack message announcing layoffs to staff at 3:00 a.m. PT, according to a separate message reviewed by Fortune. He said that within the hour of his initial message, employees who are initially affected by this decision would receive an email letting them know.
“The employees being affected aren’t just colleagues. They’re friends. They’re family. Please reach out to them,” Benioff wrote. “Offer the compassion and love they and their families deserve and need now more than ever. And most of all, please lean on your leadership, including me, as we work through this difficult time together.”
When asked for comment, Benioff sent Fortune his letter to staff.
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