Salesforce cut hundreds of employees Monday

https://www.cnbc.com/2022/11/08/salesforce-cut-hundreds-of-employees-on-monday.html

by Bhurn00985 • 4 years ago

55 46 4 years ago

cs7024• 4 years ago

Every company wants to cut spending on people, services, and facilities, because revenues are slowing down, costs are rising, and there's more uncertainty about the near term future.

The people who lose their jobs, in turn, are forced to cut their spending, contributing even more to the ongoing revenue slowdown at companies that sell to consumers.

The service providers who see their billing examined with a microscope and who are told that new projects are now on hold, in turn, find themselves forced to cut their own spending on people, services, and facilities, contributing even more to the ongoing revenue slowdown at other companies.

The office buildings who are given notice of lease terminations, in turn, find themselves forced to cut their own spending, contributing as well to the ongoing revenue slowdown at other companies.

The more every company and consumer cuts spending, the less money all companies and consumers earn. This unpleasant state of affairs is called a "recession." When it's really bad, it's called a "depression." It's no fun. Many unprofitable companies and many consumers without savings are at risk of financial ruin.

cheriot• 4 years ago

many consumers without savings are at risk of financial ruin

Yes. This is the reason for having a better social safety net. There's no reason a normal business cycle should "ruin" normal people that did not take excessive risks.

SoftTalker• 4 years ago

Having no savings is not taking a risk?

colechristensen• 4 years ago

Is it though? The social safety net usually doesn’t reach up to help people earning SV tech job salaries. I would prefer to see more friction when it comes to layoffs so we’d see less of tech giants doubling and halving their headcounts in a period of just a couple of years.

joshstrange• 4 years ago

pulls out soapbox

There's no reason a normal business cycle should "ruin" normal people that did not take excessive risks.

And this is why I get so frustrated when I hear things like "Well business owner(s) take all the risk so that's why they get all the reward (profits, or most of it)". Bullshit. For smaller companies this is more-so true but not even then is it always true. I'm not sure how many downturns or mistakes have to happen followed by layoffs for the general public to grasp this but I don't anticipate people wising up anytime soon. In a number of these layoffs we hear about "Well we misjudged the market" or "The trends didn't continue the way we thought and we over-hired". Instead of tightening their belts (less profit for owners/shareholders) the answer is always to just jettison people until the books "balance".

I own my own (side) business and I have family members who own full-time businesses, I'm well aware of the risk (and debt) we have taken on but for larger companies the top brass (and shareholders) seem nearly completely insulated from any pain. Compare that to places that have profit sharing with employees which can go down if there is a downturn/etc, this is a much better way to handle it. I'm fine sharing in the risk (which I'm doing just by working for someone, they could fire/lay me off tomorrow without warning, that's a risk) if I'm also sharing in the reward. I'm also fine with the "reward" (profit share) decreases in "bad" times versus laying off a bunch of people. Some companies do this much better than others but I really wish companies were either forced to share the rewards and/or actually feel some pain when they make bad decisions. I think we all know the people responsible for over-hiring don't actually face any repercussions for their mistakes, instead it's the people they hired then laid off. And no, paying severance or feeling bad about having to lay off people isn't really "pain" in my book.

Having a "better social safety net" is sort of a way to force "profit sharing" in a roundabout way and I would greatly appreciate it if losing a job didn't mean loss of healthcare and/or a way to put food on the table, pay rent, etc. I know from personal experience that having a good safety net (aka, my parents) makes a huge difference. Not that I play fast and loose with my money (I have an emergency fund that I could run on for 6-9+ months that I've built up) but you always have a little voice in the back of your head saying "You aren't going to end up on the streets". Not everyone has that and I'd love nothing more than for everyone to experience and have that confidence, it's what allows you to take risks (sane ones ideally, like starting your own business) knowing that failure will not ruin you.

puts up soapbox

legitster2• 4 years ago

So long as the safety nets don't prolong or worsen the recovery. Moving people out of the labor pool shrinks the economy for everyone - making it worse off for people with and without jobs. Bad policy can turn slumps into prolonged recessions.

za3faran• 4 years ago

While I agree that we should have a good social safety net, these cycles should in no way shape or form be normal. Something is obviously fundamentally broken.

Retric2• 4 years ago

In theory sure, but in practice a great deal of this is driven by earlier over investments by tech companies who saw a huge surge in profits during COVID lockdowns.

It wasn’t just online companies that benefited by changing consumer habits as people where stuck at home with little to do browsed social media and ordered food delivery etc. Setting up remote options across many industries had many similarities with the pre Y2K investments and a wave of modernization efforts. That followed by supply shortages which pushed massive investments to build more robust supply chains etc.

cs7024• 4 years ago

Although it will be endlessly debated, it doesn't matter that much how a recession got started, nor who deserves the most blame. Once the spending-slowdown spiral gets going, it can become self-sustaining on its own, beyond anyone's control, affecting both the guilty and the innocent.

manachar• 4 years ago

As many of these companies base their projections on a relatively small number of outside sources, it often strikes me as a bit of a self-fulfilling prophecy.

Big business and financial firms have been signaling a belief in a downturn for a while now -- including while posting about record profits.

redwood• 4 years ago

It's all related to taming inflation

avereveard2• 4 years ago

a lot of skilled workers enter the job market at a reduced price, they have the know how to compete in the same or adjacent sector, medium company can acquire the competences at a reduced price, their profit increase their spending, etc etc

economics is not a single company

this is the tail of feds interest rate raise cutting down investment. it will last a while, but the economy doesn't yet seem unhealthy (well except some specific bubbles, but those have been there a while and if they pop will pop because they were bubbles, not because the secondary trigger)

cs7024• 4 years ago

Agree on everything :-)

The only thing I'm not so sure about is the health of the economy. While all macro stats look great so far, they don't yet reflect the wave of layoffs we're seeing in sector after sector.

We may be going through a mild recession overall and a brutal one in bubble-land. Regardless, it will feel horrible to anyone younger than 35, who has never experienced a recession since joining the workforce at most ~15 years ago.

Waterluvian• 4 years ago

Indeed! Such a strong case for more social systems like employment insurance.

Not to oversimplify but I find “government programs” to be a good answer to basically any “tragedy of the commons” problem such as spending less during a recession.

tjixxu• 4 years ago

Can anyone smarter than me explain why this is happening two years after the entire world shutdown? Is this completely unrelated to COVID?

legitster2• 4 years ago

Immediately following shutdowns, money was cheap and companies overinvested.

Right now, interest rates are squeezing the market.

We're seeing (hopefully) a correction to a more sustainable level of business.

SQueeeeeL• 4 years ago

The 2008 financial crisis just kinda happened. These things are hard to predict, but market economies tend to create situations where boom and bust are the most efficient for growth and happen every few decades.

cs7024• 4 years ago

I'm not smarter by any means, but I do know a little bit about this.

As a response to the pandemic, the US Treasury spent ~$6T more than it collected in taxes: ~$3.2T during the Trump administration and ~$2.8T during the Biden administration,[a] and the US Federal Reserve reduced short-term rates and purchased $5T of treasury and agency bonds, flooding the market with liquidity and lowering long-term interest rates to their lowest level since WWII.[b]

As always and as ever, investors flooded with treasury checks and ultra-cheap money engaged in an orgy of speculation that would make even the most shameless drunken sailor blush. Crypto is perhaps the most prominent example of it. Trading in meme stonks would be another example. Pokemon Pikachu cards trading for $5M may be the silliest example. Or maybe the silliest example was all those smart people who came up with clever narratives to justify stock market valuations that otherwise look... unjustifiable.[c]

As the speculators threw money around while we all muddled through the pandemic, the world's supply chain system was hit with two massive shocks: (1) the pandemic, which is still limiting the availability of many items (e.g., iPhones made in China), and (2) Russia's war in Ukraine, which triggered a global food and energy crisis (e.g., there isn't enough grain being exported to feed the entire planet).

Both shocks are fueling inflation, prompting the US Treasury to cut spending and the Fed to increase rates and withdraw liquidity from financial markets. Increasing rates and withdrawing liquidity are very painful methods for reducing inflation, but they are the only methods that have been shown to work. As money started becoming less cheap to borrow and less easy to find, businesses and consumers started spending less -- first gradually, then "suddenly."

[a] https://fred.stlouisfed.org/graph/?g=WdPZ

[b] https://fred.stlouisfed.org/graph/?g=WdQ3

[c] https://www.multpl.com/shiller-pe

tootie• 4 years ago

This is pretty small adjustment for a company their size and comes on the heels of several large acquisitions and a huge hiring spree. I'm not sure this is actually a headcount reduction or just a restructuring. They have over 3000 job openings listed on LinkedIn right now.

JDEW• 4 years ago

Salesforce let go of fewer than 1,000 employees Monday, according to a person familiar with the move.
At the end of January it employed 73,541 people.

“…employees Monday”,

“…January”

Is this grammatical? Is it coherent? Or was this generated with GPT-3?

pwinnski• 4 years ago

The author was last aware of the Salesforce headcount on or near January 31.

Yesterday, Salesforce reduced their headcount.

It doesn't seem difficult to parse at all.

happytoexplain• 4 years ago

I'm not picking up on what you're implying is the confusing part.

gamblor956• 4 years ago

I think JDEW's comment was generated by GPT3 and he's asking if his own comment was coherent?

throwawaynov2• 4 years ago

Salesforce employee here. These were mostly the account executives who couldn't meet their quota. It's unfortunate that this is happening to AEs, who are usually the hardworking people at Salesforce struggling to close deals in a tough economy. It will be interesting to see what will happen to the random 'strategy', product and engineering folks who build over engineered, over priced, marketing bullock that doesn't sell.

DaiPlusPlus• 4 years ago

These were mostly the account executives who couldn't meet their quota.
account executives

...you mean "sales", right?

throwawaynov2• 4 years ago

Yes - Sales is a function/dept/team. Account executives are part of sales teams.

radiojasper• 4 years ago

They couldn't keep their sales force.

Salesforce cut hundreds of employees Monday

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