Never mind record revenue and profit, the churn must go on: Salesforce trims workforce day after bumper results
Thanks for raising the share price 25% *checks HR playbook* now get lost
To remind everyone that big biz loves to shave a few per cent off the workforce each year or quarter, regardless of its fortunes, we today present you Salesforce.
The customer relationship management giant celebrated record revenues and incredible profit by announcing it will fire 1,000 workers; about two per cent of its headcount.
On Tuesday, the cloudy goliath hit the headlines when it announced a massive and unexpected bump in income: $5.15bn in the past quarter alone, up 29 per cent year-on-year. That resulted in a $2.63bn profit from the three months to July 31, dwarfing the year-ago's $91m net income. The news saw the company’s shares leap by an almost unprecedented 25 per cent.
And then, shortly afterwards, Benioff's bunch said it was laying off some folks mostly in the various acquisitions Salesforce has made in recent years: think Datorama, ExactTarget, MuleSoft, Tableau, and others.
Those affected will be given two months to find another role at the company, and failing that, four-and-a-half months of severance pay. The generous payoff is possible, ironically, because of how well the business is doing.
Shine a light on me
Adding to the irony, Salesforce CEO Marc Benioff said on an earnings call with analysts yesterday: “We know what role we play in our industry. We know that we are a light and we have to continue to be that light, especially during these difficult times.” You'd be forgiven for thinking he’d already forgotten about the workers he’d decided to lay off.
The company said in a statement: “We’re reallocating resources to position the company for continued growth. This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities. For affected employees, we are helping them find the next step in their careers, whether within our company or a new opportunity.”
Those strategic areas seemingly include IT security and the public sector, as the company noted that it would be hiring more people in those areas. Seeing as Benioff prides himself on always looking several years into the future, the cuts are presumably part of a preemptive effort to steer his corporation through a post-COVID-19 world. ®