Salesforce is slashing about 1,000 jobs, or close to 2 percent of its workforce, as part of the strategy to reallocating resources to position the software company for growth, CNBC reported.
This is the first job cut at Salesforce, the leading CRM supplier, after acquiring Tableau data visualization software for $14.8 billion last year.
This is also the first job reduction at Salesforce during the ongoing Covid-19 epidemic that did not impact the enterprise software company.
At the end of March, Salesforce CEO Marc Benioff pledged that the company wouldn’t lay off employees for 90 days as the spreading Covid-19 epidemic was shutting down much of the economy. That period ended around the end of June.
“This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities,” a spokesperson confirmed in a statement.
Salesforce will be giving 60 days to find a new job within the company to employees affected by the job cut. They will have access to internal resources to help them in their search.
Salesforce will offer severance and pay benefits for six months for those who don’t land new positions.
“We are helping them find the next step in their careers, whether within our company or a new opportunity,” the spokesperson said.
Salesforce earlier reported a quarterly profit of $2.63 billion on revenue of $5.15 billion, with revenue growth of 29 percent from the previous year. The company said it expects revenue of $20.7 billion to $20.8 billion in its current fiscal year, which ends next Jan. 31.
Salesforce is preparing to list 300 new positions next week in order to expand the team, the CNBC report said.
Mark Hawkins, Salesforce’s finance chief, said on Tuesday afternoon’s earnings call that the company is making “strategic shifts” that in part reflect the impact of the coronavirus on how and where people work.
“This means we’ll be redirecting some of our resources to fuel growth and areas that are no longer as aligned with the business priority will be de-emphasized,” Hawkins said.
Salesforce’s revenue grew 29 percent in the fiscal second quarter, which ended on July 31,
Revenue from the core Sales Cloud, which enables salespeople and managers to keep track of business, grew 13 percent to $1.28 billion.
The Service Cloud product for customer support grew 20 percent to $1.30 billion in revenue.
The company’s Platform and Other category, which includes the Tableau data visualization software Salesforce acquired for $14.8 billion, rose 66 percent to $1.51 billion during the quarter.
In the quarter Salesforce announced the introduction of Work.com tools to help organizations return to work after the onset of the coronavirus pandemic, which caused offices around the world to close.