Salesforce.com To Cut 200 Jobs Despite Its Expectations To Make More Money

Dawn Kawamoto writes "Sometimes, making more money is not enough. Just ask Salesforce.com. The SaaS company announced it would cut 200 jobs, during its second quarter earnings call. The cuts are coming, despite the company raising its revenue forecast for its fiscal year. Salesforce.com says it's initiating the cuts to reduce overlapping roles and to (you guessed it) gain 'synergy', following its effort to meld its cloud marketing platform company ExactTarget with its social media market suite Marketing Cloud. And apparently this isn't the first time Salesforce has tried to squeeze out those nebulous 'synergies.' It reportedly cut 100 jobs in October, when it merged its social media platform companies Radian6 and Buddy Media."

Comments

Revenue is not the same as earnings

[ugmoe]

Revenue is not the same as earnings Full Year FY14 Guidance: Revenue for the company's full fiscal year 2014 is projected to be in the range of $4.000 billion to $4.025 billion, an increase of 31% to 32% year-over-year. GAAP net loss per share is expected to be in the range of ($0.44) to ($0.42) while diluted non-GAAP EPS is expected to be in the range of $0.32 to $0.34. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $511 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $146 million, and net non-cash interest expense related to the convertible senior notes, expected to be approximately $47 million.

Re:Revenue is not the same as earnings

[Xaedalus]

They borrowed a hell of a lot of money, are trying to keep within their debt covenants, and need to make good on the compensation packages. Growth has been great for them, but my guess is that they've reached the limits of easy explosive growth and have now matured their market segment. While non-GAAP is all fine and good, GAAP is what the Street and investors look at. So if they're projecting to lose -$0.44 a share, then yeah, they're going to have to downsize in order to reduce expenses to the point where they eliminate that loss going forward.

Re:Go ahead

[IANAAC]

Whenever a company uses the word "synergy" it make me believe they are using marketing hype and really don't have a clue if what they are going to try is the right thing or not.

Just once, I'd love to hear someone ask "What exactly do you mean by 'synergy?'" during one of these earnings calls, then listen to the hilarious, stumbling response. The word's been overused so much that it's lost its meaning.