Salesforce Inc. is launching a workforce reduction initiative that will affect more than 1,000 employees, Bloomberg reported today.

It’s unclear which business units are set to see cuts. A source told Bloomberg that Salesforce will enable affected employees to apply for other positions internally.

The company’s last major round of layoffs took pace last January, when it let go about 700 employees. Salesforce laid off 10% of its workforce a year earlier. Piper Sandler estimated at the time of the latter restructuring initiative that the cuts could boost Salesforce’s operating margin from 21% to 25%. It’s possible the job cuts reported by Bloomberg today are part of a new push on the company’s part to boost profitability.

In December, Salesforce posted mixed third-quarter results that topped the consensus revenue estimate but fell short of profitability expectations. The company delivered adjusted earnings of $2.41 per share where analysts were looking for $2.44. Salesforce had earlier faced pressure from activist investors to boost its margins.

In 2022, Starboard Value disclosed a Salesforce stake and told fellow shareholders that the cloud giant had a lower operating margin than some industries. Over the next few months, several other activist investors also joined the fray. In response, Salesforce took a series of steps to improve profitability.

Most of the activist funds that bought shares before the cost-cutting efforts reportedly exited their stakes by June 2023. Last year, however, Starboard stated that Salesforce still has a “lot more to go” to improve its profitability. The fund argued that the cloud giant should cut its sales, marketing and general administrative costs. It’s unclear if the layoffs reported by Bloomberg today affect employees in those three areas. 

Salesforce ended 2024 with about 73,000 employees. Although the company is reportedly cutting roles, it’s also actively hiring in other areas, which means its overall headcount may not decrease significantly as a result of the layoffs.

In November, Salesforce Chief Executive Marc Benioff disclosed that the company was recruiting 1,000 salespeople to expand the adoption of its Agentforce artificial intelligence platform. The following month, Benioff said the hiring target has been doubled to 2,000 salespeople. He added that Salesforce has so far inked more than 1,000 Agentforce deals. 

Introduced last September, Agentforce is an AI platform designed to make knowledge workers more productive. It provides access to AI agents, AI programs that can perform tasks with a high degree of autonomy. Agentforce can automate manual business chores across areas such customer support, sales and marketing.

Salesforce introduced an upgraded version of the platform called Agentforce 2.0 in December. The new release can automatically perform tasks in third-party business applications. Additionally, the underlying AI is better at processing complex user prompts that require it to analyze large amounts of data.

Photo: Salesforce