SAN FRANCISCO — Shares of Salesforce Inc. tumbled in premarket trading Tuesday, dropping 2.49% to $189.20, amid reports of fresh workforce reductions at the cloud software giant. The decline came after Business Insider revealed that the company had laid off fewer than 1,000 employees earlier this month, affecting teams in marketing, product, and data. The cuts, which Salesforce has not publicly acknowledged, mark the latest in a series of staff trims as the tech industry grapples with the rise of artificial intelligence.
According to sources familiar with the matter cited by Business Insider, the layoffs were discreet and targeted specific areas of the organization. While the exact number remains under 1,000, the move underscores ongoing efforts to streamline operations at Salesforce, a company that has long been a bellwether for the software sector. Investors appeared rattled by the news, pushing the stock closer to its 52-week low of $185.73, as tracked by Benzinga Pro data.
In a parallel development, Salesforce announced the appointment or promotion of six executives to lead key business units, including its AI-driven Agentforce platform and the Slack collaboration tool. These changes come as five high-profile leaders have departed since December, signaling a period of transition at the upper echelons of the company. Business Insider reported that the new roles aim to inject fresh leadership into areas pivotal to Salesforce's growth strategy.
The executive shakeup includes replacements for outgoing figures who had been instrumental in Salesforce's expansion. Among the departures were leaders overseeing product development and sales, though specific names were not detailed in the reports. The incoming team, comprising both internal promotions and external hires, is tasked with steering initiatives like Agentforce, which leverages AI to automate customer interactions.
This wave of layoffs and leadership changes occurs against a broader backdrop of AI-fueled restructuring across the technology landscape. Many firms are reducing headcounts as artificial intelligence tools take over routine tasks, diminishing the demand for certain positions. A December report from consulting firm Challenger, Gray & Christmas highlighted that AI was a factor in more than 54,000 job cuts throughout 2025, reflecting a seismic shift in how companies operate.
For instance, Amazon.com Inc. slashed 16,000 jobs in January alone, following 14,000 cuts in October. Those reductions targeted various divisions, including its devices and services unit, as the e-commerce behemoth pivots toward AI integration in logistics and customer service. Similar patterns have emerged at other tech powerhouses, where efficiency gains from machine learning are prompting aggressive cost-cutting.
Salesforce itself has not been immune to this trend. In September 2025, the company eliminated 4,000 customer support positions, shrinking its support team from 9,000 to 5,000 employees. CEO Marc Benioff confirmed the move during an appearance on the Logan Bartlett Podcast, stating, “the firm’s support team had been reduced from 9,000 to 5,000 employees.” Benioff attributed the cuts to advancements in AI that allow for more automated handling of customer inquiries.
Benioff's comments on the podcast provided rare insight into Salesforce's internal strategies. He emphasized that while the reductions were painful, they positioned the company to compete in an AI-dominated future. “We're transforming our support operations with AI to deliver even better service,” Benioff said, according to the podcast transcript. This earlier round of layoffs had already drawn scrutiny from employees and analysts, who questioned the long-term impact on morale and innovation.
The latest unreported cuts, though smaller in scale, add to concerns about Salesforce's workforce stability. Employees in marketing and product teams, which are central to developing new features and campaigns, were among those affected. Data teams, responsible for analytics and insights, also faced reductions, potentially signaling a shift toward AI-assisted data processing over human-led efforts.
Analysts remain cautiously optimistic about Salesforce's trajectory despite the turbulence. The stock currently holds a consensus Buy rating, with an average price target of $325.24, according to recent evaluations. This target suggests significant upside potential from current levels, driven by expectations of robust growth in cloud and AI services.
Recent analyst actions have included upgrades and price target adjustments from firms like Piper Sandler and Wedbush, which cited Salesforce's strong subscription revenue as a stabilizing factor. However, the layoffs could temper enthusiasm if they disrupt key projects. Investors are particularly focused on the upcoming earnings report scheduled for February 25, 2026, where executives are expected to address workforce changes and AI investments.
During the last earnings call in late 2025, Salesforce reported solid results but flagged macroeconomic headwinds. Revenue grew year-over-year, bolstered by demand for its Customer Relationship Management software, yet profit margins came under pressure from higher AI development costs. Benioff, in prepared remarks, reiterated the company's commitment to “AI-first” innovation, a theme that has defined its strategy since acquiring Slack in 2021 for $27.7 billion.
The integration of Slack has been a double-edged sword, enhancing collaboration tools but also requiring ongoing adjustments to staffing. The recent executive promotions in Slack's leadership aim to accelerate AI enhancements, such as intelligent search and workflow automation. Yet, with five departures in quick succession, questions linger about continuity and whether the new guard can maintain momentum.
Beyond immediate stock movements, these developments highlight deeper industry dynamics. As AI permeates software workflows, companies like Salesforce face the challenge of balancing innovation with human capital. The 54,000 AI-related layoffs in 2025, per Challenger, Gray & Christmas, represent a tipping point, where technological progress accelerates job displacement. Experts predict this trend will intensify in 2026, with roles in data entry, basic coding, and routine analysis most at risk.
Looking ahead, Salesforce's fortunes may hinge on its February earnings and how it navigates AI ethics and regulation. Lawmakers in Washington have begun scrutinizing tech layoffs tied to automation, with calls for retraining programs and severance protections. For now, the company's silence on the recent cuts leaves room for speculation, but the premarket dip underscores investor sensitivity to any sign of internal upheaval.
In the competitive cloud market, rivals like Microsoft and Oracle are also embedding AI deeply into their offerings, pressuring Salesforce to stay agile. With shares hovering near yearly lows, the coming weeks could determine whether these changes propel recovery or deepen uncertainty. As Benioff has often said, adaptation is key in tech, and Salesforce appears to be betting big on AI to lead the charge.