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Signage on a Saleforce office building in San Francisco, California, U.S., on Tuesday, Feb. 23, 2021.

David Paul Morris | Bloomberg | Getty Images

Salesforce is cutting 10% of its personnel and reducing some office space as part of a restructuring plan, the company announced Wednesday. The company employed more than 79,000 workers as of December.

In a letter to employees, co-CEO Marc Benioff said customers have been more “measured” in their purchasing decisions given the challenging macroeconomic environment, which led Salesforce to make the “very difficult decision” to lay off workers.

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“I’ve been thinking a lot about how we came to this moment,” he said. “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.”

Salesforce will record charges of $1.0 billion to $1.4 billion related to the headcount reductions, and $450 million to $650 million related to the office space reductions, the company said.

Shares of Salesforce were up nearly 3% on Wednesday.

Analysts led by Brent Bracelin at Piper Sandler, who have the equivalent of a buy rating on Salesforce stock, estimated in a note to clients that the cuts could lower operating expenses by $1.5 billion or more each year and widen the company’s operating margin to 26% from 21%. That calculation assumes that “demand drivers remain intact,” which is unlikely, the analysts wrote.

The company is eager to become more profitable through more efficient spending. In September Salesforce management called for a 25% adjusted operating margin in the 2026 fiscal year, compared with 22.7% in the quarter that ended on Oct. 31.

The cuts mark the latest round of departures at the cloud-based software company, the largest private employer in San Francisco. The company let go of fewer than 1,000 employees in November. Later that month, Bret Taylor announced his plan to step down as co-CEO on Jan. 31, leaving Marc Benioff alone again at the top of the company he co-founded in 1999.

In the three trading days after the Taylor news landed alongside Salesforce’s third-quarter earnings report, the stock had two of its three worst days of 2022, plunging 8.3% and 7.4%, respectively. 

Days later, the company announced the departure of Slack CEO Stewart Butterfield, who joined Salesforce as part of its biggest acquisition ever.

Salesforce hired aggressively during the pandemic. It said in a December filing that headcount had risen 32% since October 2021 “to meet the higher demand for services from our customers.”

Now, like many other major tech companies, Salesforce is looking to cut costs as it contends with slowing revenue growth and a weakening economy. Days after Twitter’s new boss, Elon Musk, slashed half his company’s workforce, Facebook parent Meta announced its most significant round of layoffs ever, eliminating 13% of its staff. AmazonLyftHP and DoorDash also announced significant cuts to their workforces.

Salesforce said it expects its employee restructuring to be complete by the end of the 2024 fiscal year and real estate restructuring to finish in the 2026 fiscal year.

— CNBC’s Jordan Novet contributed to this report.

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Google agrees to pay Texas $1.4 billion data privacy settlement

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Google agrees to pay Texas .4 billion data privacy settlement

A Google corporate logo hangs above the entrance to the company’s office at St. John’s Terminal in New York City on March 11, 2025.

Gary Hershorn | Corbis News | Getty Images

Google agreed to pay nearly $1.4 billion to the state of Texas to settle allegations of violating the data privacy rights of state residents, Texas Attorney General Ken Paxton said Friday.

Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.

The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.

Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.

“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.

“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.

“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”

Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.

Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.

“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.

“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”

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Virtual chronic care company Omada Health files for IPO

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Virtual chronic care company Omada Health files for IPO

Omada Health smart devices in use.

Courtesy: Omada Health

Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.

Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.

Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.

Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.

The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.

But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.

Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.

In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.

“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”

WATCH: The IPO market is likely to pick up near Labor Day, says FirstMark’s Rick Heitzmann

The IPO market is likely to pick up near Labor Day, says FirstMark's Rick Heitzmann

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Google would need to shift up to 2,000 employees for antitrust remedies, search head says

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Google would need to shift up to 2,000 employees for antitrust remedies, search head says

Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.

Sajjad Hussain | AFP | Getty Images

Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.

Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.

The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.

The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones. 

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Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.

Apple’s SVP of Services Eddy Cue testified Wednesday that Apple chooses to feature Google because it’s “the best search engine.”

The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.

Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.

“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.

Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.

Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.

The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.

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