Salesforce CEO Marc Benioff has made revisions to the company's annual strategic plan, including return-to-office mandates and policies that would have implemented stack ranking, according to an internal Slack message viewed by Insider. The changes came after soliciting employee feedback last week on a draft proposal of the plan, the message said.
But despite the new draft's softened tone, Salesforce insiders say the company is still moving towards a more aggressive, performance-driven environment.
An initial version of Salesforce's V2MOM — the company's annual strategic plan that stands for 'Vision, Values, Methods, Obstacles, and Measurements'— for its new fiscal year, shared last week with employees via Slack — called for managers to exit "bottom performers" with a target of 5% per year.
But Benioff wrote that the company is softening that proposal, a concept known as stack ranking, in a note to Salesforce employees posted on an internal Slack channel on Monday night.
The revised draft removes the annual 5% target and now says "Managers rate their employees, reward top performers, and exit under-performers to ensure our prosperous new future," according to a copy viewed by Insider. Benioff also wrote in the Slack post that the concept of "ranking" will be removed from performance evaluation "completely."
Some employees feel wary that the change in language won't be a substantial shift in the general stack ranking idea, which forces a certain number of people to be labeled as underperformers.
"He's still pushing performance culture," a Salesforce employee who read the revised draft told Insider. "Just by removing that 5% target doesn't mean he won't still do it. He'll just look for a different management method."
New return-to-office mandates
Benioff also shared a mandated return-to-office policy. This, too, was revised after employee feedback. It currently requires three days a week in the office for non-remote employees and four days a week for employees in "non-remote" and "customer-facing" roles. Engineers will be required to work from the office ten days per quarter, down from 20 days in the initial draft.
Less than a year ago, Benioff was slamming other companies for enforcing strict return-to-office mandates.
But that tone has changed significantly in recent months, as Salesforce faces pressure from a mob of activist investors who want the company to reduce expenses, reign in splashy, high-priced acquisitions and, above all, increase stock price, which has lost roughly half its value as demand for enterprise software wanes and quarterly growth slows.
"Our margin growth is more important than revenue growth," the revised V2MOM reads. Back in September, during its 2022 Investor's Day, the company promised 25% operating margin by its fiscal year 2026 through reducing expenses and acquisition costs.
Hired Bain to help with 'restructuring'
According to the strategy document, Salesforce has also tapped Bain to help it implement a restructuring to "drive solid operating margin improvements and sustainable growth."
The announcement that Bain has been hired to help with restructuring could be an indicator that more layoffs than the company has previously announced could be on the way. Bain did not immediately respond to a request for comment.
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%.
At the height of the pandemic, Salesforce's enterprise cloud software products were in high demand as people transitioned to working remotely. In November of 2021, the company's stock price reached an all-time high of over $300 a share. Revenue for fiscal 2022 grew 25%, to $26.5 billion, according to the company's annual report.
Also in 2021, Salesforce acquired Slack Technologies for $27 billion — the most expensive acquisition its made to date — and increased its headcount from 57,000 to 73,000 people.
Salesforce has long been known for its "Ohana" culture that encourages workers to think of the company as family. Benioff referenced Ohana in his Slack message Monday night, noting that it will play a factor in performance evaluations going forward. "Ratings will factor in how work is done and not simply outcomes," he wrote.
But this characterization no longer rings true for its employee base, rattled by mass layoffs and Benioff's public comments on the company's decline in productivity.
Or, as an employee previously posted in a Slack channel, "Can execs commit to never referring to Salesforce employees as 'family' again? You don't fire family to compensate for your own mistakes," another wrote.
Salesforce did not immediately respond to a request for comment.
