Salesforce cuts around 1,000 roles globally despite record quarter

Salesforce has laid off around 1,000 staff worldwide in a restructure aimed at delivering "continued growth", just days after it reported a record quarter.

The software giant began notifying affected employees that their roles were being eliminated on Wednesday (August 28), one day after reporting its second-quarter results.

It posted a record US$5.15 billion in revenue for the quarter, up 29% year-on-year, with net income of $2.63 billion. As a result, it lifted its full-year earnings outlook from $20 billion in revenue to between $20.7 and $20.8 billion. Chief executive Marc Benioff said in the earnings release it was "humbling" to record one of the best quarters in Salesforce’s history against the backdrop of multiple crises around the world.

It was bittersweet for some, as a reorganisation of resources quickly followed. The cuts cover more than a dozen locations around the world, including in Asia-Pacific. The around 1,000 affected employees were told they have 60 days to find a new role in the company. The cuts equate to about 1.9% of the company’s workforce of 54,000. 

A Salesforce spokesperson said of the retrenchments: "We’re reallocating resources to position the company for continued growth. 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. For affected employees, we are helping them find the next step in their careers, whether within our company or a new opportunity."

Salesforce chief financial officer Mark Hawkins had alluded to an upcoming restructure in the earnings call. "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," he told analysts.

It is not unusual for technology giants like Salesforce to clear up to 10% of their workforce annually. However, this comes at a difficult time for employees, as Covid-19 has affected the job market and reduced salaries. Aware of this, Benioff in March had pledged on Twitter that the company would avoid any significant layoffs for 90 days during the pandemic even as the company shifted to remote working.