Cramer Warns Of More Tech Layoffs After Salesforce Job Cuts: 'Their Time In The Sun Ended Over A Year Ago'

Prominent market commentator Jim Cramer on Wednesday cautioned investors the tech industry may see more lay-offs owing to continuing macroeconomic headwinds.

“There are so many tech companies with bloated payrolls that are still trying to grow rapidly, overpaying for new employees, and they fear that lay-offs will mean that their time in the sun is over,” Cramer said on CNBC. “They don’t seem to understand that their time in the sun ended over a year ago."

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Cramer’s comments come in the wake of Salesforce Inc CRM reportedly planning to reduce its current workforce by 10%. The company also plans to close down select offices in order to help manage costs and expects the restructuring to lead to charges between $1.4 billion and $2.1 billion.

Stock performance: Cramer stated while the industry may see more cuts this year, investors should refrain from becoming too optimistic about how tech companies and their stocks will perform once more employees are laid off.

“I’m saying that this decline won’t be as bad as the 2000 and 2001 [recession]. It won’t be that. Nor am I saying that tech stocks can rally endlessly on cost cuts,” Cramer added.

Salesforce’s stock price closed 3.57% higher on Wednesday in the wake of the job cuts announcement. ‘The Big Short’ Investor Michael Burry, too, has expressed skepticism on the share price movement saying “job cuts are so not the reason to own” the stock.

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