Salesforce, the largest corporate employer in San Francisco, is poised to shed more real estate.
The management software firm indicated during an earnings call it will likely continue to shrink its office footprint, the San Francisco Business Times reported.
“We’re never going back to how it was — everyone knows that,” CEO Marc Benioff said during the third-quarter call, about a shift to remote work.
The San Francisco-based company has been whittling down its offices from before the pandemic, which ushered in the era of remote work. A quarter of the city’s offices are now empty. And Salesforce has already ditched half its office space Downtown.
Benioff estimated many companies have about half their employees working in the office “even with mandatory workdays.”
As of Jan. 31, Salesforce had 1.9 million square feet of leased and owned property in San Francisco, according to its annual report. It also had 705,000 square feet of sublet offices and 212,000 square feet available for sublease in the city.
The company now leases 875,000 square feet at its headquarters in Salesforce Tower at 415 Mission Street from Boston Properties. The lease expires in 2031, but it doesn’t appear it intends to shed space inside the signature tower, according to the Business Times.
In July, Salesforce put 350,000 square feet of office space, or 40 percent of its 43-story Salesforce West tower at 50 Fremont Street in the Financial District, up for lease. That marked its third office cut since the pandemic.
The cloud-based software firm bought 50 Fremont in 2015 for $638 million, before Salesforce Tower was built across the street. It employs 10,000 workers in the city, who have been allowed to permanently work from home part of the week.
In March 2021, it subleased 339,000 square feet at the Salesforce East tower at 350 Mission Street to Yelp and Sephora. At the same time, it canceled its 325,000-square-foot lease at the unbuilt Parcel F tower.
Last February, Slack, the messaging company now owned by Salesforce, listed 200,000 square feet for sublease at 45 Fremont, according to the the Business Times. At the same time, Salesforce leased a 75-acre ranch near Santa Cruz for onboarding, training and hobnobbing.
Early last month, Salesforce confirmed that it had laid off hundreds of workers, and news reports suggest more layoffs are in the works.
Amy Weaver, chief financial officer for the company, told investors that Salesforce would continue to evaluate its real estate footprint and make cuts where necessary.
“Over the past two years, we have continued to re-imagine our real estate strategy,” Weaver said. “That is not only to optimize for scale, but also continue (a) hybrid work environment and how people are working and how they’re using their space.
“And this has included reducing our footprint fairly significantly right now.”
— Dana Bartholomew
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