> The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant
Kinda odd how you attribute them "beating the street" more to Mathew McConaughey's presence than the work output of 8 thousand employees. Can you elaborate on why this is so clear to you?
u sound like u get paid for salesforce-pr
Enjoy your Salesforce stock grant, I guess ;-)
Basically, scoop up talent while you can, then cut the lowest performers. It's basically the last step in a thorough interview process.
It is one thing if the layoffs are at a startup running out of money, and another if layoffs are at a profitable company
It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy
Any company with competent management. That includes not cargo culting layoffs while turning a blind eye to the damage they cause to a company.
> It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy
What's mind-boggling is that people think the cost savings from a layoff happens in a vacuum. There are definitely repercussions in terms of loss of productivity, increased employee churn, brand damage, increased difficulty hiring in the future, loss of operational knowledge...
Layoff are a sign of mismanagement. That has nothing to do with the "cost-of-capital".
Your statement is as naive as "A Production Bug / Latency is a sign of Incompetent Software Developer" Should we fire you as soon as you hit the first bug?
BTW, You have a fundamental misunderstanding of Cost of Capital
Tomorrow if your salary is cut by 50%, would you cut-down on extra expenses? Is that a sign of mismanagement from you?
if you knowingly and willfully put yourself into a situation which resulted in your salary being cut by 50% then yes
My point is that over-hiring and layoffs aren't "good for the company" as the post I was responding to claimed. They're both a sign of bad management that incurs a cost on the company being poorly managed. One of those costs is that top performers leave as they are the first to recognize mismanagement.
I see no problems in their behavior. The insane rate of hiring was useful to give a good boost to my salary in a couple of years.
Here's to hoping they go back at hiring like crazy again.
Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision. Did you take responsibility and fire yourself as the primary bread-winner for your family? Why not?
Did you buy any high-growth tech stocks in 2021? If you did, that was a terrible decision.
Any idiot can arm-chair hindsight decisions
Meh. Securing financing in 20/21 was great but buying in 20/21 was kind of terrible.
Everyone I know who bought during that time period is now stuck for 30 years because over-extended and took a bath on property value, and a lot of them are already regretting that choice as life returns to normal and they realize life in the outer suburbs is kind of miserable (especially as they RTO).
Conversely, refinancing and leveraging cheap cash in 20/21, building a pile of powder, and then waiting until 2023-2024 to buy looks like a much better move. At least in my local market, either prices are down significantly or the seller can't afford a lower price and the inventory just sits on the market.
Again, securing financing in 20/21 was great but buying real estate at those prices wasn't great relative to alternatives.
If a mortgage was you only way to get leverage in 20/21 then you should've taken out a mortgage. But if you had other ways to get leverage at the lower rates -- eg taking out a line of credit on existing real estate or borrowing against assets -- other options have been performing better and especially over the next few years will continue performing much better.
Your rebuttal, is exactly my point. Leaders make strategic bets all the time, especially in the tech world where you have to constantly take risks. Not all of them will come off and leaders have to shut-down / layoff people when bets fail.
I'm admonishing OP for cherry-picking the time when leaders made the wrong bet.
You need to make a good decision and learn more about the fact that what you pay for an asset (which is fixed forever) is typically much more important than the loan rate (which can be refinanced at lower rates). Also, overpaying for a house is a trap that cannot be unloaded no matter what the interest rate without bringing cash to closing while underpaying allows for an easy sale no matter how high the interest rate.
But even if paying a celebrity $10 million for endorsements is a bad decision (and we don't know if it is or if it isn't -- it's probably a wash, as most marketing expenditures like this are), that decision is unrelated to why 8,000 people were laid off.
In my years in business, it's nearly impossible to draw an accurate cause and effect line between marketing and sales. Too many other factors at work.
Or perhaps these Marketing departments are just really good at internal marketing of budget usage?
E.g. BMW doesn't create car commercials just to get everyone to think about BMW when buying cars. They make car commercials to make sure everyone knows that BMW is expensive and good, so that driving a BMW is a signal that you're wealthy.
Similarly, Salesforce might want to make it clear that if you go with them, it's a "defensible" choice that you can easily explain to your boss.
also even if we focus on the consumer market there are very successful companies which don’t spend any money on traditional marketing and don’t do ads at all.
Naming a couple would make your claim more persuasive.
Is not really a new marketing concept
"What the heck to Matthew McConaughey use SalesForce for ?"
or more importantly:
Didn't the layoffs happen in January (the end of their fiscal quarter) and wouldn't they have taken the costs of those layoffs and subsequent severance in that quarter? So they recorded record revenue and profits _despite_ laying off people, not because they laid them off.
Like everyone else in Tech, they over-hired because they were objectively in a different state of the world in 2021, which was possibly everyone's best year in 1-2 decades. Then 2022 rolled in, shit hit the fan on inflation, Ukraine war and a seemingly overnight massive hike in rates after being in negative yield territory for a while... guess what? Companies went back to the drawing board, stared at lower revenue expectations, higher costs, worse margins given operating leverage and decided they could do without X% employees to favor profitability over growth, since there's nowhere near the same growth to be had in 2022-23 as there was in 2020-21
Conceptually, I dislike layoffs as much as the next person... but keeping the same cost structure against deteriorating topline growth is just Bad Business, and that's how CEOs get fired and companies go under. Ask the owner of the pizza joint nearest to you and they're likely to agree.
All in all, unemployment is still at record lows so I'm incline to believe that laid-off workers are finding employment elsewhere, which is the good side of Capitalism.
It could have been worse, John... a lot worse
That's not true. They announced 8,000 layoffs in January but they haven't executed all of that yet. As per the quoted WSJ article:
> In January, the company said 8,000 workers had to go. “It’s an unfortunate part that you have to say goodbye to folks who, in many cases, are your friends and you have relationships with,” Mr. Benioff said in an interview. “But, ultimately, the success of the business has to be paramount.”
> After an executive retreat in February, he proposed in a draft of a year-ahead strategy plan that the company rank employees based on metrics, including how much money salespeople bring in. Those in the bottom 5% would be routinely dismissed, according to a draft of the policy posted on the company’s Slack channel and described to The Wall Street Journal.
> The company has been reducing its workforce since November, when it cut hundreds of salespeople. In January, the company announced restructuring plans to lay off 10% of staff — roughly 7,000 people — and shed some of its office real estate.
> Since then, thousands of workers from that planned 10% cut have been notified of their terminations. Insider has also reported that remaining employees are feeling increased performance pressure, and some are being pressured to quit with severance offers that are not as big as those being laid off.
> Salesforce has not confirmed whether it has notified all 10% of workers included in the official restructuring plan yet. Insider previously reported that at least one person familiar with the matter said the company was evaluating last month whether it needs to cut an additional 10%.
Do people who would be in a place to make the decision about their companies choice of CRMP really need to be marketed to in order to know about Salesforce? Seems like a wasted budget IMO.
There's also little value in pushing this clickbait style journalism to the front page.
First of all, it is objectively incorrect:
> Per the WSJ, the company will be letting go of 8,000 members from its massive workforce
The layoffs they are referring to happened in early January. They are not laying off another 8000 employees.
Beyond that, they paid an A-list actor $10M out of their marketing budget to do a set of commercials (one of which aired at the Superbowl). Considering they exceeded all analyst expectations for revenue and profits in the last quarter, it's safe to say that some of their effort is working.
The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant has nothing to do with Matthew McConaughey.