Mar 24, 2023
Salesforce Considers More Job Cuts Amid Profit Push, COO Says
(Bloomberg) -- Salesforce Inc. could see another round of job cuts while the company continues to focus on improving profitability, said Chief Operating Officer Brian Millham.
“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,” Millham said Friday in an interview. He added that consultant Bain & Co., which Salesforce is working with to review the business, has yet to provide final recommendations.
After years of hiring and big acquisitions, the software company is newly focused on profitability. Salesforce in January announced it would eliminate 10% of its workforce, or about 8,000 employees, its largest-ever headcount reduction, and close offices across the US. A group of activist investors who have taken stakes in the company are pushing to cut costs further in search of increased earnings and improved profit margins.
Salesforce wouldn’t be alone in the industry if it wiped out more jobs. Meta Platforms Inc., Amazon Inc. and Twilio Inc. announced additional rounds of major cuts in recent weeks, amounting to more 21,000 workers.
Millham, who joined the company as its 13th employee in 1999 and was promoted to chief operating officer last year, said he’s focused on making the sales and go-to-market divisions he oversees more efficient, and finding new selling opportunities, such as with the company’s recently announced AI products. He has taken over some of the operational and customer-facing responsibilities previously held by co-Chief Executive Officer Bret Taylor before that executive left the company earlier this year, including appearances on earnings calls.
The San Francisco-based company, the top maker of customer relations management software, has been looking at measures including reducing the number of salespeople assigned to each deal, utilizing third-party sellers and emphasizing productivity such as monthly sales targets, Millham said. Salesforce also is urging employees to go into the office more often, although it hasn’t imposed a return-to-office mandate. Attendance at company sites is up significantly in recent months, he said.
“From the very beginning this was a performance-oriented culture,” Millham said. “We may have drifted a bit from that during the pandemic as we took care of our employees and made sure everyone was staying healthy.” He added that he wants Salesforce to have both a performance and wellness culture.
The stock has jumped 43% this year, closing at $190.06 Friday in New York, making up almost all of its value after a 48% plunge in 2022.
Investors rejoiced earlier this month when the company said it would reach margin targets years earlier than anticipated. “We feel pretty good about what we’ve been able to deliver so far,” Millham said, before adding “it’s not a job that’s done by any stretch.”
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