August 28, 2020
Salesforce layoffs are in action around the world and the company is facing withering criticism.
The job cuts come five months after CEO Marc Benioff said the CRM giant would not “conduct any significant layoffs over the next 90 days.” The company had closed its offices due to COVID-19 and moved to keep paying its hourly workers. On March 25, Benioff cited his longtime Ohana ethos as one key reason. (Benioff has touted “Ohana,” or treating employees like family, since he want on a vacation in Hawaii in the late ‘90s. The credo is meant to embrace caring for one another, not taking a “Knives Out” or “Parasite” sort of approach).
Salesforce’s Marc Benioff
But it appears the clock stopped ticking on that layoff moratorium, even as Salesforce on Aug. 25 reported record revenue of $5.15 billion, or $1.44 per share.
Indeed, the second quarter of 2020 marked the first time Salesforce surpassed the $5 billion threshold. Analysts, according to CNBC, were expecting $4.9 billion, and 67 cents per share. Salesforce also raised its sales guidance into fiscal year 2021, indicating it does not expect to incur much damage from customer COVID-19 cutbacks; in fact, if anything, the cloud IT software company stands to continue benefiting because its platforms streamline and improve operations.
Salesforce Employees Seething over Layoffs
Salesforce’s financial boon, paired with its pervasive Ohana claims, has employees fuming.
“‘Business is business’ and ‘It’s okay to cut fat’ are some pretty rich … takes when talking about a company that a) just put up record numbers for the last quarter or two, and b) never … shuts up about ‘Ohana’ and everyone being one big family,” wrote one anonymous poster on TheLayoff.com.
Another said: “I have never in my 20 years of corporate experience seen this [**] play out. Company-wide layoffs are a last resort, when they are actually struggling. I have worked for some pretty terrible companies, but never have I seen complete disregard for livelihoods when there is literally no need for it.”
Keep up with our layoff tracker to see which companies are cutting jobs and how the channel is impacted.
An anonymous poster on TheLayoff.com also wrote this week that the Salesforce sales distribution group ranks among those impacted. In a roundabout way, that ostensibly could affect the indirect channel. Channel Futures asked Salesforce to comment on any changes managed service providers, VARs and integrators might experience because of the layoffs. Rather than answering the question, Salesforce responded with the same statement it has provided to other media outlets:
“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.”
The job losses do seem to inordinately impact employees of acquired companies. Posts on TheLayoff.com indicate that people who were brought over from ExactTarget, MuleSoft, Tableau (a $15.7 billion deal, three times more than Salesforce’s second-quarter revenue) and others are …
… hurting the most.
Channel Futures also reached out to a number of Salesforce channel partners and a couple of industry analysts, to no avail. We will update our coverage if we do hear back.
On the Other Hand, Empathy …
In a twist of irony, a Futurum Research analyst earlier this week praised Salesforce for “showing empathy for its employees who are trying to endure the COVID-19 pandemic.” Sarah Wallace was referring to Salesforce’s decision to extend its work-from-home policy and give parents six more weeks of vacation.
“An empathetic approach seems to be working for Salesforce as it announced one of its best quarters yet,” she wrote.
The juxtaposition of such corporate kindness and profitability against active job cuts is exactly what has so many Salesforce employees up in arms.
“That All Hands call was so infuriating,” one person wrote on TheLayoff.com on Aug. 27. “So, so tone deaf to discuss record earnings in the same breath as making tough decisions to let people go, only to go invest hard in other areas. So much self-congratulations for all the hard work that went around to prepare for this layoff. Our whole team just got cut, and we’ve done a lot of work for so many of the leaders on that call. Hard not to feel embittered and traumatized by that call and this whole experience. I was OK yesterday but now I’m just furious.”
Salesforce is based in San Francisco and employs more than 50,000 people around the world. Workers posting to TheLayoff.com report that between 1,000 and 2,000 Salesforce staff are impacted by layoffs, getting the axe “over 15 min video calls,” according to one commenter. They have 60 days to find new roles within Salesforce or they will get 18 weeks of severance.
Despite the pandemic, Salesforce has had an active 2020 — something its second-quarter earnings underscore. So far, the company has:
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