Software firm Salesforce, San Francisco's largest employer and commercial real estate occupant, is shedding property nationally and letting go thousands of employees in another example of tech companies cutting back after growing early in the pandemic.
The company said Wednesday it's reducing its headcount by 10% while pursuing "select real estate exits and office space reductions within certain markets," according to a filing to the Securities and Exchange Commission. The company expects its real estate restructuring to be completed by 2026, according to the filing. Salesforce has more than 70,000 employees globally.
A representative for Salesforce, a seller of software related to functions such as sales, analytics and marketing, declined to comment on questions from CoStar News on the properties it plans to leave.
Salesforce, founded in 1999, occupies roughly 3.8 million square feet across the U.S. and it had recently called some employees back to the office in a reversal of an earlier remote work policy. The layoff of thousands of its employees comes after the company has sponsored advertisements featuring actor Matthew McConaughey talking about using "our power and our people," and that "hope and trust are in short supply."
Its headquarters is located in San Francisco's tallest building, the 61-story 415 Mission St., according to CoStar data. The company also owns the 42-story 50 Fremont St. in San Francisco after buying the building for $640 million, or about $783 per square foot, in February 2015.
Salesforce plans to move into a roughly 500,000-square-foot space in Chicago this year at 333 W. Wolf Point Plaza, according to CoStar data. Its other major hubs include New York where it occupies roughly 271,000 square feet and Atlanta where it leases about 160,000 square feet. Other sizable Salesforce offices are located in Dallas, Indianapolis, Salt Lake City and Toronto where it occupies roughly 63,000 square feet and 11,000 square feet in Vancouver, according to CoStar data.
The company in November was telling some employees to return to the office as sales slowed in the wake of adopting its "work from anywhere policy" in 2021 allowing employees to work remotely for as many as four days a week.
Tech companies were among some of the most visible adopters of remote work policies after the pandemic started in March 2020. However, some of these companies began calling employees back to the office last year including Apple, Twitter and Snapchat parent company Snap Inc.
Salesforce expects to spend between $1.4 billion to $2.1 billion in charges related to its restructuring plan, according to the SEC filing.
"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," Co-CEO Marc Benioff said in a letter to employees on Jan. 4.