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When Salesforce announced it was laying off 10% of its workforce last month, you might have assumed that meant that everyone who was affected was informed at that time. With social media flush with people talking about Salesforce layoffs today, the company says these are part of that original announcement, but some folks are learning about their fate today.
The overall number of approximately 7000 people announced at the beginning of January remains unchanged, according to the company. “These are part of the reductions we announced in January,” a company spokesperson told TechCrunch.
Some of today’s announcements are hitting in Europe with the Irish Independent reporting that 200 of 2100 Irish employees were laid off today, fitting in with that 10% target.
CEO Marc Benioff reportedly telegraphed that the sales group could be targeted in a company meeting last month, telling employees that remote workers weren’t as productive as folks in the office, and that half the sales team accounted for 96% of the revenue, suggesting that the other half accounted for just 4%. It seems likely that department could take a big hit.
Regardless, more people learned they are out of work today, joining the sad parade of tech employees being laid off in recent months. At the time of the announcement, Benioff said that the company had hired too many people during the pandemic.”As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Benioff said.
Salesforce has been under pressure to cut costs from activist investors. Just last week Elliott Management announced it had taken a multi-billion dollar investment in Salesforce. That was after Starboard Value took a significant stake in October. Two other activists, ValueAct and Inclusive Capital are also operating inside the company. Having four activists at the same time is probably contributing to the pressure to increase profitability and reduce spending, which often translates into workers being let go.
On Friday, the company announced it was bringing on three new members to its board of directors, which was likely a nod to the activists, who like to have board representation as part of their strategy. These layoffs are also probably another step in appeasing the demands of the activist investors.