The economy hasn’t crashed and their earnings and profits are both up by double digits as of yesterday’s report:

https://investor.salesforce.com/press-releases/press-release...

This is businesses reacting to activist investors and trying to quash workers asking for better compensation. To the extent that the economy lags it’ll be due to layoffs affecting people who circulate their income more effectively than shareholders.

> their earnings and profits are both up by double digit

To be more specific, their adjusted non-GAAP profits are higher than expected. By GAAP measures they posted a loss for the previous quarter.

Fair but I’m going by the first thing their CEO told investors:

> “For the full year we delivered $31.4 billion in revenue, up 18% year-over-year, or 22% in constant currency, one of the best performances of any enterprise software company our size,” said Marc Benioff, Chair and CEO of Salesforce. “We closed FY23 with operating cash flow reaching $7.1 billion, up 19% year-over-year, the highest cash flow in our company’s history, and one of the highest cash flows of any enterprise software company our size.”

> This is businesses reacting to activist investors and trying to quash workers asking for better compensation.

I feel like you're saying this with a negative connotation. Isn't that what the business is supposed to do? Run more efficiently, cut excess bureaucracy, make more profits?

That’s a bit too simplified, though, bordering on the shareholder value fallacy. Efficiency isn’t an objective fact in most cases and reasonable people can disagree about whether something has benefits on a different timeframe (e.g. R&D) or which are hard to quantify (cutting support & customer relations often seems like a pure win at first). Some shareholders thought Apple wasted too much money developing personal music players and should stick to computers, and listening to them would have cancelled the iPod and never reached the iPhone.

Given that they are reporting solid profits on very large revenue volumes, I don’t think you can make the case that this was a financial necessity and the scale is too large to have had much detailed thought going into it. (And “excess bureaucracy” is cut by sacking the C/VP-level managers who built it, not the rank and file implementing those policies.)

Inflation is up by double digits, too, so profits going up by double digits may just be running in place.

it seems a bit bizarre to me that a company like Salesforce would need 60k people though

Salesforce has a lot of subsidiaries including Slack, Tableau, Quip, Heroku, and MuleSoft.

The economy hasn't crashed yet.

But money's not free anymore

The economy has crashed? That's news to me. Last I heard we had record low unemployment across the board and widespread, if modest, growth.

unemployment is a lagging indicator of economic malice. also, we have boomers a large generation retiring from work force, so even if the economic pie is not expanding or stagnant, there are labor pressures and these are not evenly distributed in the economy.

Trades is seeing phenomenal demand for labor, where as white collar people are going to get pink slips esp. in the fields (finance, tech, commercial real estate management, refinancing/mortgage) that have boomed during last decade.

None of what you said is either false or evidence of an ongoing economy crash.

what I meant from my comment is, when there is un-deniable evidence, it is too late!

And when there is no evidence, it's to soon. It cuts both ways: you can't predict market movement, and after it's moved you can't do anything about it... As J.P. Morgan put it (when asked what the market would do that day): "It will fluctuate".

Absence of evidence is not evidence of absence. When there is no evidence.. there is no evidence that is it. Predictions are hard, but anyone forward looking has to make at least assumptions. The goal is to be less wrong or err on the side of caution.

Sure keep predicting economic collapse and eventually you'll be right. People make careers out of it. In good times there will always be good and bad indicators to pick from.

(it’s “malaise”)

thank you! (was using the wrong spelling all the time, mentally of course)

Exactly this. Financial situtions change but you still haven't to honor contracts that were signed. The 8K employees didn't have the same contracts as a long term spokesperson...that is not unusual at all...

So what? Can a company not take responsibility for the lives of thousands of employees? Either don't be a headcount glut, or take responsibility for the damage you'll inflict on these real life people and their families. Why is the expectation from managers to be decent human beings is so unreasonable? Do we need a contract for that?

There is no responsibility on the part of the company to do anything other than what they agreed to do.

If employees wanted to be kept on even in a downturn, they should have negotiated for it, but I suspect the price they would have had to pay for that would make the entire prospect unattractive.

You just want to eat your cake, and have it afterwards too.

Well I know of other employers that do take in to account the impact on the life of they're workers and families, and will hire very conservatively, and would resort to firing only if very extreme circumstances. It's because they were not trained in American style business schools, where everyone is just a number, And there's no such thing as decency. You somehow believe this is natural, it's not, it's insane.

Hiring very conservatively hurts GDP and increases long-term unemployment, especially for unproven entry level candidates.

They actually like hiring new grads. Building slowly and soundly is not bad for the GDP.

Many things are done for the sake of growth at the expense of employees...however those employees generally get much higher salaries in exchange for that. There is a reason Google, Facebook and Apple are the huge companies they are...and they were all started in the US.

Companies like Intel are facing new realities in over hiring as well (not to mention overextending on new fabs)...apparently they preferred not to have layoffs but instead cut salaries, bonuses and 401k matching. Personally I would prefer to fire the bottom 5% than risk the top 10% leaving because of a short sighted cash flow play.

The obvious question is why didn't these laid off salesforce employees go get a job at the company that never fires people instead?

"But we had to do <terrible thing> because it's the law" isn't an excuse, just a different form of condemnation.

> "But we had to do <terrible thing> because it's the law" isn't an excuse

If the “terrible thing” you’re referring to is paying someone according to a contract signed then, yes, it’s an excuse for why they had to do it.

That’s literally how contracts work.

If you agreed to pay one person enough to do nothing that you have to lay off thousands of other people, I don't care if you signed a contract to do it—it's still worthy of condemnation.

All it changes is the timing of when the action worthy of condemnation occurred.

$10M/yr = 50x $200K/yr

Not paying him and getting sued for it would save about 50 jobs temporarily. Not "thousands"...

Changes the semantics, but not the underlying ethics.

Why is paying a celebrity spokesperson terrible?

Because many of the engineers here either do not understand or are unwilling to accept that society operates in more dimensions than the technical and "rational". They see celebrity and functions like marketing and sales as inherently bullshit and unnecessary.

Market cap bubble popped. See also: SPACs imploded.

It'll take a while for a consensus narrative to emerge explaining the widespread tech layoffs.

Usual suspects are: post-pandemic hangover (over hiring), C-level & boards are feckless lemmings (copycats, groupthink), another round of revanchist Capital sticking it to Labor, profit taking by institutional investors, and macroeconomic stuff (end of cheap capital, blah blah blah consumer confidence, and so forth).

My personal theory: The MBAs couldn't think of anything else to do. They're admitting their growth has ended.

Cost cutting, including layoffs, happens in the absence of strategery [sic], plans for the future. So there's nothing to invest in. So they "return monies to their investors".

What's Meta's plans? Social networking and digital advertising have entered the top plateau of the S-curve. And it's not yet clear they can monetize their pivot to 3D porn (the Zuck's "megaverse").

What's Amazon's plans? It's now "Day 2". AWS is on autopilot and will continue to print money. If the rest of the conglomerate disappeared tomorrow, the share price would increase. There's nothing left in the B2C space to do.

As a counter point, Apple definitely has plans. IIRC They keep increasing their R&D. (And they didn't over staff.) So no layoffs.

The major reason was ZIRP going away.

All of this is downstream of that.