‘this is the first of many’

Salesforce Inc (NYSE: CRM) is in focus this morning after revealing plans of cutting its global workforce by about 10%. The cloud company also intends to close some of its offices.

Salesforce to note up to $2.10 billion in charges

The said layoff will affect between 7,500 and 8,000 of its employees in total.

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Those that are let go in the United States will receive benefits, including health insurance, and salary for a minimum of five months. Ones outside the U.S. will get a “similar level of support”, the company confirmed.

Salesforce expects the said restructuring to result in up to $2.10 billion in charges. Between $800 million and $1.0 billion of it will be recorded in its current financial quarter. In a letter to employees, CEO Marc Benioff said:

Environment remains challenging and our customers are taking a more measured approach to 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.

Jim Cramer reacts to announced restructuring

In its latest reported quarter, Salesforce Inc saw weakest growth in its revenue as headwinds, including a strong dollar weighed on its sales. Reacting to the restructuring it announced today on CNBC’s “Squawk on the Street”, Jim Cramer said:

This is the first of many, I think. Remember they have a Starboard in there. They’ve been pushing for cost cuts. Demand size is fine for Salesforce. They have good growth but people felt their growth margins weren’t that good. This should flow right to the bottom line.

The Mad Money host urged other overbuilt tech companies to follow in Salesforce’s footsteps.

It is also noteworthy here that the sharp sell-off in shares of the software firm over the past twelve months could be an opportunity considering the Wall Street continues to recommend buying Salesforce stock.