SF Based Dreamforce Announces 1,000 AI-Related Job Cuts

Salesforce, one of the largest companies in the Bay Area, continued to vacate San Francisco this week by completely moving out of the Salesforce East tower, with all of their formerly occupied floors going to lease.

Founded in San Francisco in 1999, the cloud-based software company swiftly became one of the tech darlings of the Bay area, with its sales, customer service, and e-commerce products boosted to having an IPO in 2004 and passing the $1 billion revenues mark in 2009 – during the height of the Great Recession. Through the 2010’s, Salesforce continued their dominance, including Salesforce Tower being the name behind the tallest building in San Francisco. They grew so much that they took over another skyscraper, 350 Market, with the name changing to Salesforce East.

However, the COVID-19 pandemic, high rent costs, multiple changes in leadership, and a growing work-form-home force took its toll on the company in the 2020s. Salesforce began large cuts in 2022, with the company largely pulling out of Salesforce Tower, subleasing half of their former headquarters in July 2022. While a growing work-from-home force led the company to leave more and more office space, many employee cuts were likewise announced. Multiple rounds of firings occurred in late 2022 and early 2023, including a large 10% across the board cut occurring in January 2023 as a result of too many people coming on board during a jump in sales during the pandemic. That one cost around 7,000 people their jobs, with another 1,000 being let go in 2024.

In April 2023, the company then completely abandoned the Salesforce East building, leaving the company with over 700,000 square feet of office space to sublease. The city’s homelessness and drug issues were also a major concern, nearly costing them Salesforce’s annual massive conference, Dreamforce, last year. Somehow, the company agreed to keep the conference in the city through 2027. More good news then came in December 2024 when it was announced that the company would be hiring 2,000 people for Agentforce, their AI branch. Things seemed to have turned around for Salesforce…until this week.

Through a WARN Act notice earlier this week, Salesforce revealed that they would be letting go 1,000 new people, with many of them coming in San Francisco. While the company has said no official word on why the layoffs occurred, exiting employees told various media outlets that it was because of the company focusing more on AI and taking out the human element.

“Do we need to hire everybody in San Francisco?” said Salesforce COO Brian Millham last month when questioned about continued job losses in San Francisco. “Or can we think about other locations that are cheaper where we can get really incredible labor like India and Mexico City.”

Salesforce wasn’t the only major company to have AI related cuts this week, with Pleasanton-based Workday cutting 1,750 jobs in their own AI-focused shift. Many analysts hoped that the mass layoffs in the San Francisco tech industry of 2022, 2023, and 2024 would be reversed this year, especially with the advancement of AI firms. However, with the cuts this week, it looks like that may not be over just yet.

“AI is turning out to be a mixed blessing,” said Julie Ochs, a San Jose-based headhunter and hiring specialist, to the Globe on Friday. “We’re seeing a lot of new firms and new AI hires in San Francisco and the surrounding cities. But, at the same time, we are now seeing job losses begin to rack up as AI replaces many jobs at more longer standing companies. It’s the way technology is going, but for San Francisco and Silicon Valley, the question is becoming if AI will ultimately be the huge hiring boon the city wants with more office space taken over, or if it cancels it out. The Salesforce and Workday sackings this week are a bit more of a hint where things are going.”