Salesforce Layoffs Continue as It Grapples with Its Family Values

Investor pressure appears to be ruffling feathers at Salesforce

Salesforce Layoffs Continue as It Grapples with Its Family Values
CRMLatest News

Published: February 3, 2023

Charlie Mitchell

“Ohana” is a Hawaiian word that means family and support system. Marc Benioff, CEO of Salesforce, has repeatedly used the term to define the CRM vendor’s culture.

Yet, the bleak layoff stories swirling the Silicon Valley stalwart have hit that reputation hard.

After mass exits in January, Salesforce has cut 258 more jobs. According to SFGATE – a San Francisco news website – these will impact staff in “sales and customer service,” “technology and product,” and “general administration.”

The news comes as activist investors make their presence felt, perhaps forcing Salesforce’s hand.

Much of their focus seems to be in shifting Slack from the forefront of Salesforce’s messaging. Indeed, the UC platform is picking up most of the – well – slack.

For instance, prior to this latest round of layoffs, The Register reported: “There’s no more Slack left to cut.”

The news is unfortunate, particularly as Slack is well placed within Salesforce’s portfolio. It overlays its CRM solutions and Contact Center Genie, with Einstien AI running between the stack. That is a potentially powerful enterprise communications proposition.

Yet, its formation appears to have come too late. After all, many businesses already switched to Microsoft Teams during the pandemic – largely due to the familiarity everyone has with Office – leaving little room in the UC space for Slack to exploit.

Indeed, Teams has cemented itself as the UC market leader, with 280MN users. Such a sizeable lead in a mature market is likely difficult to claw back, and the $28BN price tag on slack now seems overegged, to put it delicately.

The good news for Salesforce is that it remains the most dominant player in the CRM market – with IDC noting that it outsells Microsoft – its closest rival – by four to one in the space.

Cementing this status seems to be the focus for now, after a glut of acquisitions in recent years, including Slack, MuleSoft, and Tableau – loosening the purse strings significantly.

Now, investors and pulling these tight, and Salesforce is seemingly appeasing them.

One of those investors is Elliott Management, which seized a multi-billion dollar stake in Salesforce last month and is preparing board member nominations to push its agenda.

Upon the announcement, Jesse Cohn, Managing Partner at Elliott Management, stated:

We look forward to working constructively with Salesforce to realize the value befitting a company of its stature.

To achieve this aim, pushing further cost-cutting initiatives is likely top of the agenda, for which the investor has a reputation. In the past, it has not proven to be shy of making this aim clear.

In the UK, some will remember how it attacked SSE – a utilities firm in which the investor holds a significant stake – over its green energy plans.

Many linked to Salesforce will hope it doesn’t take a similar route and look for cuts in its environmental and social initiatives – such as its Catalyst Fund.

These moves would likely damage Benioff’s Ohana messaging beyond repair.




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