More tech layoffs come after Salesforce cut 10%

On Wednesday, CNBC’s Jim Cramer warned investors that the tech industry is likely to see more layoffs due to persistent macroeconomic headwinds.

“There are so many tech companies with bloated payrolls still trying to grow quickly, overpaying new hires, and they’re worried that layoffs will mean their time in the sun is over,” he said. he stated, adding, “They don’t seem to understand that their stay in the sun ended over a year ago.”

His comments come after Selling power said Wednesday it was cutting 10% of its staff and reducing office space. The cloud-based software company had more than 79,000 employees as of December.

Salesforce shares rose 3.57% on Wednesday.

The layoffs, part of a larger restructuring plan at Salesforce, are the company’s latest staff cuts after laying off hundreds of employees in November.

Other technology companies, including Metaplatforms, netflix and Lyftlaid off staff to cut costs last year as persistent inflation, Federal Reserve interest rate hikes and normalization of demand since the height of the pandemic continue to weigh on the industry once booming.

Cramer said while the industry is expected to see more cuts this year, investors should refrain from becoming overly optimistic about how tech companies and their stocks will fare once new employees are laid off. .

“I say that this decline will not be as bad as the years 2000 and 2001 [recession]. It won’t be that. Nor am I saying that tech stocks can bounce endlessly off cost cuts,” he said.

Disclaimer: Cramer’s Charitable Trust owns shares of Salesforce and Meta Platforms.

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