The decision comes less than a year after the company removed a further 1,000 to 2,000 positions as part of an earlier cost-cutting programme.

Shares dropped 5.5% in extended trading shortly after the update, despite the firm reporting fourth-quarter revenue of $14.64 billion, slightly ahead of market expectations.

Chief executive Enrique Lores confirmed that teams working across product development, internal operations and customer support will be affected. During a media briefing, he said: “We expect this initiative will create $1 billion in gross run rate savings over three years.”

The company expects adjusted earnings per share for fiscal 2026 to sit between $2.90 and $3.20, below the consensus forecast of $3.33. The outlook for the first quarter is also muted, with guidance of 73 to 81 cents per share.

HP is seeing high interest in advanced PCs, which accounted for more than 30% of its shipments in the fourth quarter ending 31 October. Even so, the business is preparing for higher component costs. 

Analysts at Morgan Stanley have warned that increasing prices for dynamic random access memory and NAND chips are likely to squeeze margins for major computer makers, including Dell and Acer.

Lores said the financial impact would be felt from the second half of fiscal 2026, though current inventory levels should shield the business in the short term.

He added: “We are taking a prudent approach to our guide for the second half, while at the same time implementing aggressive actions like qualifying lower cost suppliers, reducing memory configurations and taking price actions.”

Across the technology sector, companies are cutting roles while reallocating resources into new product strategies.

This reduction is part of the company’s mission to optimise its operations and enhance growth, according to reports from Bloomberg.

A Salesforce spokesperson commented on the layoffs, stating the importance of continually assessing the company’s structure to best serve customers and support growth areas. 

“Like any healthy business, we continuously evaluate our organisational structure to ensure we are positioned to serve our customers effectively and drive growth. In some instances, this leads to roles being eliminated,” the spokesperson stated.

The company did not disclose specific details about which departments or regions were most affected.

This reduction follows previous cuts earlier this year when Salesforce laid off 700 employees in January, about 1% of its workforce. 

The layoffs aligned with a larger restructuring that also saw the company eliminate 8,000 positions, or roughly 10% of its global workforce, at the beginning of 2023. 

These cuts were attributed to a slowdown in customer spending and a pivot to focus on key growth areas, particularly around Salesforce’s Data Cloud product.

Salesforce’s Chief Operating Officer, Brian Millham, spoke on the company’s continuous works to ensure efficiency and maximise productivity during a June investor conference. 

“Are we getting the most from everybody in the business? If we’re not, we’re going to have to make reshaping decisions,” Millham said.

The trend of job cuts within Salesforce mirrors a global movement across the tech industry. In 2024, numerous tech companies have announced layoffs as they strive to control costs following years of rapid growth. According to Layoffs.fyi, over 100,000 tech workers have been laid off this year alone.