Salesforce, the enterprise software business, is planning to lay off up to 2,500 people in a new round of layoffs, following in the footsteps of other Big Tech firms. Salesforce intends to cut off 2,500 or more employees due to “performance” difficulties, according to Protocol, citing sources.
Several hundred others are likely to be placed on a 30-day review, with the goal of terminating them after a month, according to the article. Salesforce confirmed the news in a statement to CNBC, saying, “Our sales performance methodology encourages accountability. Unfortunately, this can lead to some employees leaving the company, and we assist them in their transition.”
It did, however, state that the layoffs affected “fewer than a thousand” workers. Earlier this year, the corporation had 73,541 employees. In an August filing, Salesforce stated that staff had increased 36% in the previous year “to accommodate the increased demand for services from our clients.”
Salesforce previously cut off approximately 90 contract workers and imposed a recruiting freeze through January 2023, according to Protocol. According to the report, investors are now seeking a higher return from Salesforce, which has always directed its profits into expansion, including spending billions to purchase companies such as Slack and Tableau.
Starboard, an activist investor, is also targeting Salesforce. According to an internal memo obtained by Insider, Salesforce paused hiring and put a hold on recruiting for some available positions in May to cut costs. Activist investor Starboard recently purchased a stake in Salesforce and urged the company to increase profitability.
Under Pressure
In the last year, Salesforce stock has dropped more than 50%. According to annual statistics, the company’s personnel expanded from 57,000 in 2017 to around 73,000 in 2021. This was fueled in part by a series of high-priced acquisitions in recent years, including the $27.7 billion acquisition of Slack last July. Investors now want the corporation to concentrate on earnings rather than growth.
When Salesforce let off employees in August 2020, it gave them 60 days’ notice and severance pay, as well as placement assistance and a few months’ worth of benefits. If the employer believes that employees are being fired for poor performance, it is unclear if the same type of package would be extended.
Carolyn Guss, a representative for Salesforce, did not reply to multiple requests for comment. Brent Hyder, chief people officer, and Lori Castillo Martinez, chief equality officer, did not reply to requests for comment. Salesforce, on the other hand, confirmed hundreds of job cuts on Monday in statements sent to other news sites following publication.
Layoffs in other companies
In October of this year, Microsoft, one of Salesforce’s main competitors in business software, announced a round of layoffs. Earlier today, Meta Platforms Inc. CEO Mark Zuckerberg announced that the firm will lay off more than 11,000 employees in the first large round of layoffs in the company’s history.
On Wednesday, a statement revealed 13% of the employee layoffs. In addition, the corporation will prolong its employment freeze into the first quarter. Following multiple quarters of poor earnings and revenue declines, Meta, whose stock has fallen 71% this year, is taking steps to cut costs.
The cut, the company’s most significant since its inception in 2004, reflects a steep slowdown in the digital advertising industry, an economy on the verge of recession, and Zuckerberg’s multibillion-dollar investment in a speculative virtual-reality push known as the metaverse.
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