Salesforce cuts jobs after reporting record revenue, creating “shocked disbelief” in the company, one newly fired Seattle employee told GeekWire. The cuts, announced internally on Tuesday and Wednesday, cover about 1,000 jobs, or 1.8% of Salesforce employees, according to Bloomberg News and CNBC.
Current and former employees say the layoffs include an unknown number of employees at Seattle-based data visualization company Tableau Software, which was acquired a year ago by the company in San Francisco based customer relationship and cloud technology for $ 15.7 billion.
“We had to make tough decisions when it comes to allocating resources and showing the company around our strategic growth areas to continue our momentum in the second half and beyond,” wrote Marc Benioff, Salesforce co-CEO and co-founder, in an internal memo to employees, without explicitly referring to the cuts in jobs.
In an interview with GeekWire on Tuesday afternoon, before word of the layoffs began to emerge, Tableau CEO Adam Selipsky said the company continues to hire in areas including sales, product development and marketing. The pandemic has accelerated the digital transformation at many large companies, and has attracted new demand for technology including data analysis and visualization.
At the same time, Selipsky said, the continuing uncertainty in the world economy also calls for a prudent approach.
“It’s important to make sure all our resources are focused on the key opportunities for our customers,” Selipsky said. “We focus on real time and focus on making sure of it. At the same time, we are continuing to open up new percentages. ”
Selipsky said Salesforce and Tableau remain committed to growing in the Seattle area. Benioff called the region the company “HQ2” when he announced the purchase a year ago.
‘Shocked disbelief’ among employees
The job cuts came as a surprise to some employees, especially after Salesforce’s record quarterly earnings. The company’s share rose 26% in trading on Wednesday after the financial report.
“Given the near-record numbers, and every other positive Marc Benioff has talked about, making a dismissal of this scale and magnitude during a global pandemic seems very unexpected,” said Vanya Tucherov, an employee of Tableau of more than 10 years whose role in testing and quality assurance engineering was eliminated as part of the layoffs.
Tucherov said via email, “Especially since Salesforce is so proud of a commitment to trust and not shy about culturally adapting the Hawaiian term ‘Ohana’ to describe the relationship it has with its staff and customer base. well, the composition of dismissals under these circumstances seems to indicate that we are valued as a family, as long as we are not considered to have a detrimental effect on the affordable side of the ledger.This is not how one treats family, nor how a company builds trust with its employees. ”
“Shocked disbelief seems to be the consensus reaction, both of the people from whom the positions are terminated and of those who remain,” Tucherov wrote.
Tucherov said the support he received from his former colleagues was “incredibly positive”. Tucherov acknowledged the trends in the industry toward automation in software testing, but said that many in the company “understand the value of having knowledgeable clients’ attorneys to validate that the user experience is as close to the experience we want.” that our customers have. “
‘Re-allocating resources for continued growth’
Salesforce refused to confirm the total number of people affected by the cuts. The company employed 54,255 people on July 31, cutting the 1,000 reported jobs to 1.8% of its workforce.
A company spokesman said in a statement, “We are allocating resources again to position the company for continued growth. This includes continuing to hire and refer some employees to apply our strategic areas, and eliminate some of those positions that “no longer mapping out our business priorities. For affected employees, we help them find the next step in their careers, or in our business as a new opportunity.”
For the quarter ended July 31, Salesforce reported total revenue of $ 5.15 billion, up 29%, and profit of $ 2.6 billion.
Tableau is part of the “Platform and other” category, which grew to $ 1.5 billion in quarterly revenue of $ 912 million the year before, by 66%. Tableau was responsible for 41 percentage points of that growth, said Mark Hawkins, Salesforce president and chief financial officer, about the company’s revenue call.
Benioff had promised that the company would not make a major layoff in March for three months, amid the economic uncertainty of the first spread of COVID-19. Tableau employed more than 4,200 people worldwide at the time of the purchase announcement last year.
Notices of dismissal began circulating Tuesday afternoon, and were expected to be completed this afternoon, ahead of a Salesforce virus meeting for all hands.
