Is AI an Excuse? Why Salesforce’s Layoffs Tell a Bigger Picture 

For months now, news of artificial intelligence replacing jobs has effectively swamped nearly every piece of AI media. A big cat and mouse game – a doltish case of will it won’t it – and many publications (ourselves included) have answered this question with a yes, AI is and will replace many jobs, especially in the tech sector.

However, as tech layoffs continue to remain a rampant trend and more companies continue to attribute them to current AI being proficient enough to replace workers in their thousands, the sense that this trend might be more of an illusion than anything is becoming more apparent. In fact, it might just be an excuse.

Addressing Salesforce’s Layoffs

When news broke of Salesforce CEO Marc Benioff announcing that the company had begun “rebalancing” its workforce by using AI agents to replace around 4,000 customer support division employees, the backlash was severe. 

Benioff, who had continuously remained bullish about the impact of AI on jobs thus far, was suddenly thrust into the spotlight and questioned by the media. Two months ago, he insisted that the AI Salesforce would not lead to “some huge mass layoff of white collar workers” and that everyone who had this fear needed to “let it go.” 

Looking at this on a more granular level could suggest that Benioff’s comments were, in fact, misinterpreted – after all, the golden buzzword “rebalance” had been used, indicating that when he said support headcount dropped from 9,000 to 5,000, the 4,000 were not actually laid off. 

However, in parallel to this, Salesforce told Salesforce Ben that the company had “redeployed hundreds”, not thousands – opening up a bigger discussion as to what happened to the remaining positions and when. 

“I Think AI is a Scapegoat”

Industry voice Matt Pieper told Salesforce Ben that he had been theorizing what happened to these remaining positions not accounted for by Salesforce, and that he likely wasn’t the only one. 

“It could have just been redeployment, but we don’t know, right?” he said. “And that’s the problem. We don’t know.”

“We saw very transparent words – 9,000 heads to 5,000 heads. That 4,000 went somewhere. People have asked, and nothing has been said. So that leads me to believe it’s not AI. I imagine some of it is – like, maybe out of that 4,000, maybe it was 1,000 or 500, but I’m not sure it is. I think it’s a scapegoat.”

If Matt’s hypothesis is even close to true, then that leaves between 3,000 and 3,500 jobs unaccounted for. It was recently reported that Salesforce laid off 350+ workers across San Francisco, Washington, and Ireland, but it is not clear whether or not any of these employees were working in customer support.

It Isn’t Just Salesforce

It may be easy to point the finger exclusively at Salesforce and critique them for potentially using the concept of AI-driven layoffs as marketing, but it’s not just Salesforce. 

Take Microsoft, which has reportedly laid off over 9,000 employees this year under the guise of realigning for AI and efficiency. However, it is no secret that heavy capital expenditures for costs such as data centers and AI infrastructure have contributed to rising costs within the company, increasing the pressure to maintain profitability while also investing heavily.  

More recently, the SoftBank Vision Fund announced plans to lay off 20% of its total employee base in a bid to move from broad startup investments toward AI infrastructure and foundational models. 

Here, AI is the stated strategic direction, but there have also been reports of rising investor pressure, and SoftBank has had a prior round of layoffs. This latest move could indicate plans to tighten operations, focus capital, and reduce risk in non-core/underperforming segments.

A $300M Restructuring Budget

Although Marc Benioff insisted that AI layoffs would not be an issue for Salesforce (and look how long that took to be dismantled), experts are concerned about the possibility of more layoffs or rebalancing before the end of the year. 

This is due to Salesforce’s restructured budget, which has tripled from $4M as reported in its second fiscal quarter to $300M in its third fiscal quarter. All or most of the restructuring efforts may have already taken place, but Robin Washington, Salesforce’s Chief Operating & Financial Officer, said that the company was “reallocating resources and ruthlessly prioritizing [their] investments.” 

Does that point all fingers at AI as the shiny new toy? Possibly, but this is certainly not the largest restructuring budget Salesforce has had over the last two years. 

In Salesforce’s FY25 Q4 report, they reported a restructuring budget of $298M; in FY24 Q4 it was $173M, and in FY24 Q1, it was a staggering $711M. This does coincide with major layoffs – in February 2025, Salesforce laid off over 1,000 workers due to AI advancements and laid off over 1,000 employees across 2024 as well. 

Either way, it is not yet clear whether or not there will be further layoffs before the year is over. 

Is AI Really Replacing This Many Jobs?

AI might not have been the culprit for all of Salesforce’s recent layoffs, but that does not detract from the fact that AI is, in fact, affecting the job market today. 

According to researchers at the Federal Reserve Bank of St. Louis, occupations that have heavily adopted artificial intelligence in recent years have experienced substantial unemployment increases. 

In fact, results from one of their recent surveys revealed “a striking correlation” between AI’s prevalence and unemployment increases since 2022, particularly in technology sectors, as reported by CFO Dive. 

Not only that, but the 2025 Workforce Skills Forecast reported that 8M jobs in the US alone will be impacted by agentic AI 2030, and that “workers who don’t adapt face a higher risk of role displacement.”

Aside from this, it has also been reported that the UK’s top consulting firms have been cutting graduate jobs due to AI and offshoring, signifying that the disruption caused by AI is already affecting the market.

However, there is one main argument against this kind of scenario actively playing out in today’s AI climate: AI still isn’t that intelligent. 

There is no denying that AI has developed in leaps and bounds, especially over the last year, but there is still little evidence that can replace or even subsidize entire teams or workforces. For companies that have tried, a few have had to revert to hiring humans instead of relying on AI, like Klarna. 

So What Is It?

So, if Salesforce’s layoffs were not actually attributed to AI (at least wholly), then what were they attributed to? 

Nick Damoulakis, the CEO of AI software company Orases, recently took to LinkedIn to share his thoughts on the matter, posing the possibility that the layoffs could have been a result of good old-fashioned revenue pressures, hidden behind the AI advancements label. 

“‘AI is replacing jobs’ sounds futuristic and bold… while ‘we’re not hitting our numbers’ sounds fragile,” he wrote. “AI is transforming work, yes. But when companies cut people, it’s rarely just about technology. It’s about margins, markets, and managing optics. AI has simply become the sleek fig leaf of 2025.”

Former NYC lawyer David Giller also shared this view, blatantly saying, “Let’s stop pretending this is innovation.” 

“Salesforce didn’t ‘reimagine support’ with AI. They cut nearly HALF their support team and used AI as the excuse,” he wrote. 

“Here’s what nobody’s saying: 100 million sales leads sat untouched for 26 years. Execs ignored the backlog, blamed ‘understaffing’. AI shows up, cleans house, and suddenly it’s progress? No. That’s just a leadership failure disguised as a hoodie and buzzwords.”

Perhaps most flagrantly of all, Software Development Team Lead, Jessie Grenfell, highlighted the importance of not taking what CEOs like Marc Benioff say at face value. 

“‘It’s progress from AI!’ sounds better to investors than ‘We’re flailing, so we had to cut jobs.’ Of course they’ll use that framing,” she wrote. “At scale, sure, efficiency can reduce headcount (more likely just allow business to expand without proportionately scaling operations). But almost half of customer support has been replaced by AI, as Salesforce just claimed? Please.”

“Even if you’re complaining about the layoffs, when you couch it by regurgitating their marketing spin, you’re inadvertently helping out with snake oil sales.”

Has Salesforce’s Attitude Changed?

For definitely not the first time this year, this playout has forced Salesforce’s community to consider whether or not the CRM giant’s attitude to its workforce and the future of labour has changed. 

Back in March, when Agentforce 2.0 was announced at this year’s TrailblazerDX, Salesforce presented Agentforce as a vessel for the future of “digital labor”, and that term – which has confused, surprised, and annoyed the community since – was born. 

From that point on, I began questioning the way Salesforce viewed the future of tech work. Although the company has consistently insisted the path forward is paved with humans and AI working together, this was the first time that I had noticed the AI tools being marketed as able to perform in ways humans couldn’t – not getting tired, not burning out, and not living a life. The perfect solution to capitalism’s biggest problem: the workforce being human. 

As the year has progressed, this kind of attitude shift has only become more apparent. Matt told me that one of the biggest giveaways was the way Benioff had referred to the rebalanced employees in an interview – as “heads”.  

“There’s the callous language – ‘heads’,” he said. “You used to hear [Salesforce] talk about my employees like ‘my people’ and ‘families’. To see those terms switch to heads and resources is a very telling sign that this company is not managing the way it used to. It’s managing as a corporate entity in the new Wall Street world.”

Final Thoughts

For over 25 years, Salesforce’s ever-growing and ever-passionate workforce has steered them along a path of market dominance. Now, however, this very workforce is having to face the possibility that AI may be the stronger contender when it comes to them or the technology, despite conflicting messaging from their CEO. 

Yet, there is a singular silver lining here – this shouldn’t necessarily stoke worry but awareness. If many of these layoffs aren’t directly tied to AI, then the workforce has more time to adapt, retrain, and transition into new roles without the urgency of a sudden technological displacement.

Most importantly, when you next hear about layoffs from Salesforce or any other tech companies, consider why they could be happening, instead of jumping to the conclusion that AI is the sole culprit. AI may have a part to play, but it may not be the whole reason, too.