Salesforce conducted another round of layoffs on Thursday affecting mostly salespeople as part of its plan to cut 10% of its workforce, Insider has learned.
Salesforce largely spared sales people in the first wave of layoffs in January, but current and former employees recently told Insider that they expected cuts to come to those teams on February 1, right after the company's fiscal year ended on January 31 and salespeople completed their fourth-quarter sprints to close deals. Like most companies who sell software to businesses, the fourth quarter is traditionally its biggest sales quarter as sales people push their clients to sign contracts to make sales quotas.
One insider said it was a "bloodbath," affecting sales leaders and Salesforce's marketing cloud.
Salesforce began notifying employees via email at 1 a.m. pacific time. It's unclear how many employees Salesforce laid off this time. Some internal chatter discussed 2,000 employees. But about 4,000 employees were missing from Salesforce's company-wide Slack channel, one person said, down to around 80,000 now from 84,000 on Jan. 31. That may also include contractors who left at the end of the fiscal year, one person said.
In the UK, just under 400 employees were notified they are up for "consultation" — meaning their job has been targeted to be cut, but hasn't been eliminated yet, according to emails viewed by Insider. The UK requires employers to warn employees 30-45 days in advance of laying them off, depending on the size of the workforce to be cut.
Salesforce is also moving to cut hundreds of jobs in other parts of Europe, one person told Insider, although the process for such steps takes longer and involves more consultation with different stakeholders. This person believes that 200 jobs in Germany and 300 in France are being targeted, as well.
LinkedIn was flooded with posts from US employees announcing they had been laid off from Salesforce, including people with sales titles as well as solutions engineers (which is typically a pre-sales position).
On January 4, the company announced plans to lay off 10% of its workforce as part of a broader restructuring plan meant to reduce costs, which could cut up to 7,000 people based on Salesforce's last published headcount number of 73,461 employees. Execs have repeatedly told employees, through emails and all-hands meetings, to expect rounds of layoffs to last for weeks, Insider reported.
A Salesforce spokesperson told Insider that today's cuts were part of the reductions the company announced in January and declined to comment on the number of people no longer on the company-wide Slack channel.
It's unclear how close Salesforce is to being done with its rolling rounds of layoffs. Even if the company has already notified most of the 10% it plans to cut, one person familiar with the matter said the company is evaluating whether an additional 10% of staff will be cut later this calendar year depending on financial performance. Another insider also reported hearing internal talk regarding potentially bigger layoffs.
Meanwhile, activist investors have been swarming Salesforce. Starboard Value disclosed a significant stake in Salesforce in October. Starboard first approached Salesforce this summer and spoke with some of its executives and has since pushed for cost-cutting measures. Salesforce laid off a few hundred salespeople in November, a person familiar with the matter told Insider. Then in early January announced plans to cut 10% of its workforce. Since then, other activist investors have piled on, including Elliott Management, the world's most feared hedge fund.
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