Salesforce announces restructuring, 10% workforce reduction

In a regulatory filing, the company stated, "On January 4, 2023, Salesforce announced a restructuring plan intended to reduce operating costs, improve operating margins, and continue advancing the company’s ongoing commitment to profitable growth. The Plan includes a reduction of the company’s current workforce by approximately 10 percent and select real estate exits and office space reductions within certain markets. Decisions regarding the elimination of positions are subject to local law and consultation requirements in certain countries, as well as the company’s business needs. The company estimates that it will incur approximately $1.4 billion to $2.1 billion in charges in connection with the Plan, of which approximately $800 million to $1.0 billion is expected to be incurred in the fourth quarter of fiscal 2023. These charges consist primarily of $1.0 billion to $1.4 billion in charges related to employee transition, severance payments, employee benefits, and share-based compensation; and $450 million to $650 million in exit charges associated with the office space reductions. Of the aggregate amount of charges that the Company estimates it will incur in connection with the Plan, the company expects that approximately $1.2 billion to $1.7 billion will be in future cash expenditures.The actions associated with the employee restructuring under the Plan are expected to be substantially complete by the end of the company’s fiscal 2024, subject to local law and consultation requirements. The actions associated with the real estate restructuring under the Plan are expected to be fully complete in fiscal 2026. The estimates of the charges and expenditures that the company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. In addition, the company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Plan."