The past year brought ups and downs to San Francisco's office market, and one of the world's largest cloud-service companies — and a local corporate nameplate — added to the negative column.

San Francisco-based Salesforce reported that it leased or owned 900,000 square feet in the city as of Jan. 31, according to a filing with the Securities and Exchange Commission. That is down 45% from the 1.6 million square feet the company reported at the same time last year.

"Excluded from this amount is approximately 2 million square feet of leased and owned property in San Francisco that is currently leased to others, or available for lease, as we continued office space reductions in fiscal 2024," the company said.

Much of the current space is in the company's headquarters at Salesforce Tower, acquired by Boston-based BXP in 2019 for $211 million, where it occupies 58% of the 1.42 million-square-foot office tower. There is 125,000 square feet of space for sublease listed at the headquarters and Salesforce pulled out of a 325,000 lease commitment a few blocks away last year.

Salesforce announced in early January plans to cut 10% of its workforce and give back office space across the country. The company declined at the time to offer details on its real estate reductions and the new SEC filing offers the company's first official accounting of the reductions to date. Salesforce did not immediately respond to phone calls or email requesting comment.

Saleforce is hardly the only company to cut back on space. Fellow tech companies ebay and enterprise software giant VMware also cut thousands of San Francisco Bay Area jobs recently, according to reports. This trend isn’t unique to California, tech companies across the country also steps to reduce their headcount, such as Seattle-based Microsoft, Meta and others.

San Francisco’s office market continues to struggle with its post pandemic recovery, according to CoStar data.

The city's availability rate climbed to nearly 26% this year, and the financial district’s rate stands at 34%, compared to just 6.6% prior to the COVID-19 pandemic. The market still has the potential to sink further.

“We expect to see 35% availability by the end of the year,” Robert Sammons, senior research director at Cushman & Wakefield’s San Francisco office, told CoStar News. “It took 63 quarters to recover from the last financial crisis. Before the pandemic we were booming, it was a sharp fall.”

While there still might be distress ahead, 2023 did see positive signs and an uptick in leasing activity, according to Nigel Hughes, senior director of market analytics at CoStar Group.

This was primarily due to two large leases by artificial intelligence companies, OpenAI and Anthropic. The companies took up over a combined 733,000 square feet in the city.

“These AI leases are a good sign in that they show that the tech growth model that powered the last boom has not entirely gone away,” said Hughes. “When VCs and other investors place billions in these tech companies, their growth plans still include substantial amounts of office space. What we don't know yet is how much more growth of this type we will see in the years ahead.”