On Friday, Bloomberg reported that more layoffs could be on the way at Salesforce, quoting chief operating officer Brian Millham, who indicated that the company could be adding to the ongoing job cutting at the CRM leader and in tech in general. If the layoffs happen, it would come on top of the 10% cut in January.
“The structure of the organization — if we feel like it needs to change and reshape — we’re going to make those moves to drive the efficiencies,” Milham told Bloomberg. Driving efficiency is corporate speak for cutting more jobs as lower payroll should mean lower operational costs, hence more efficiency. Milham said the company is working with Bain and Company and they are waiting on the management consultants’ advice on how to proceed.
The company, which announced an agreement with Elliott Management in which the activist firm has agreed to withdraw its slate of nominees to the company board of directors, has been dogged by four other activists in addition to Elliott. Cost cutting is a big part of what these firms want, and that often comes at the cost of employee job culling.
While these types of layoffs are in line with management thinking these days, as we wrote over the weekend, it’s not always clear that they work in the long run, resulting in pain for the people involved, and those left behind, with no clear evidence that layoffs provide long-term financial success.
Bob Stuz, a longtime CRM industry executive who had stints at Salesforce, Microsoft and SAP in his long career, said on his No BS with Bob Stutz podcast last week, it’s unbelievable that companies could have gotten to this point.
“You don’t turn a profit. Your margins aren’t good. You’re gonna have to let people go. But I still come back to the point of how do you wake up one morning and realize that you have 10,000 more people than what you need or 20,000 more people than what you need or 3,000 more people than what you need. How does that happen? People weren’t doing their jobs at the end of the day. You have to really question the leadership in these companies. What were they doing.” Stutz said on the podcast.
He’s not wrong. If these cuts come to pass, Salesforce would join Amazon and Meta, which last week announced a second round of layoffs as the tech layoffs continue unabated. At least 150,000 tech workers have been laid off since the beginning of the year.