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

Go ahead

[Anonymous Coward]

Slashdot corporate sycophants justify this using "shareholder value" in 3...2...1....

Re:Go ahead

[LordLimecat]

If they are making money and can continue to deliver their product while reducing workforce, by what possible logic would you justify keeping on redundant jobs?

Might as well just donate the money to the workers if you wanted to do that, and call it the charity that it would be. Businesses exist to make money and provide a product, not to create jobs-- get over it.

Re:Go ahead

[penglust]

I mostly agree with you but just a couple of points.

1. 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.

2. If they really did not need them then why did they hire them in the first place? This hire - fire mentality really does just make companies look incompetent.

3. Its just a company to help dip shit salesmen darken my door so who really gives a shit anyway.

Re:Go ahead

[JackieBrown]

2. If they really did not need them then why did they hire them in the first place? This hire - fire mentality really does just make companies look incompetent.

Most companies evolve and spots are no longer needed or new ones are. If they didn't do this, they would be critiqued for not keeping up with the changing landscape.

We mainly hire contract workers for our call center now so that we could avoid the hire-fire press.

There is a cost to hiring and firing people and most companies don't just do that on a whim. My job trains people for 4 weeks before even letting them talk to a customer. It takes several months to recoup the cost for just training. When we fire someone or reduce ("right-size") our workforce, there is a lot of cost to that as well (most obvious being unemployment benefits.)

Business tries to increase profits, new at 11

[Logger]

Given they are not a charity, I don't see the issue. Maybe they have 200 people just fetching coffee that they just realized don't really contribute to the company. Layoffs are often a way to gid rid of dead weight.

Re:Business tries to increase profits, new at 11

[i kan reed]

But with the special caveat that more tax cuts on those profits will make them hire more people.

Re:Business tries to increase profits, new at 11

[Anonymous Psychopath]

Exactly.

It's sad to see that Slashdot has become such a set of Corporate worshipers. Every cut, no matter how ridiculous it may be, brings out an army of people that say BULLSHIT like the O.P. here.

In less than a week there will be a whining post about how corporations can't get good help. Well, maybe you firing them after they help you succeed is part of the problem.

Hint: a lot of you people are taking corporations as if they have been handed down by God. They aren't.

The problem isn't finding people to hire. Unemployment rates show there's plenty of warm bodies around. The problem is finding people with skill sets and costs aligned to what the business needs. This isn't some sort of emotional worship of business. That's how trade worked before we invented currency.

Re:Business tries to increase profits, new at 11

[turgid]

What usually happens is that the company does reasonably well inspite of it management, and that fact that it's making a profit is a "signal" to the geniuses at the VP level and above that they obviously have too many staff, so they make cutbacks, forcing the remaining staff to work harder and longer hours unpaid (evenings and weekends and such like) to get things done.

Meanwhile, the remaining staff get their CVs out and leave. Then things start to go wrong, deadlines are missed, quality plummets and customers get angry, demand money back, freebies and even start to sue.

Next, that part of the company gets closed down with the loss of all jobs but the "intellectual property" goes elsewhere.

Meantime, since the cost base has been further reduced, the VPs get a bonus and the share price goes up.

Re:Business tries to increase profits, new at 11

[hairyfeet]

I"d like to hear you explain how come every boom America has had has come under high taxes for the top 5% and every time the economy is in the shitter the taxes on that same top 5% has been low.

Voodoo Economics don't work, the "job creators" myth is just that, and giving ever more wealth to the top 5% just destroys the economy as that money never circulates, its hoarded. Libertarians can believe in their "invisible hand" which frankly should go right beside sky bullies on the "divorced from reality" scale because we already tried libertarian-ism and it was later known as "the age of the robber barons" for all the collusion, market rigging and violence against the workers.

Libertarianism like every other ism sounds doable on paper, IRL the douchebags at the top will ALWAYS ruin it for everybody else.

Re:Business tries to increase profits, new at 11

[Crosshair84]

Hairyfeet, seriously.step away from the keyboard because you're doing nothing but making yourself look stupid. You have your areas of expertize, but you know effectively nothing about economics and even less about history.

The "age of the robber barons" saw the standard of living of the average worker rise faster than at any point before or since. Sure conditions were poor for the workers in the factories, but that was because society itself was too technologically primitive to produce the goods we have today.

How about I sit you in front of a PC from 1988 and have you do your job from that computer? Would you lament about the poor condition of the PC world from that era as the result of "the age of unfettered capitalism" and attribute to today's PC world to the result of government regulation? Or would you recognize that things were that dismal and primitive because that was the best that-they could do at that time given the technology available to them?

Were things "primitive" on Gilligan's Island because Thurston had all the money? Or was it because the capital equipment to produce the goods that they were accustomed to did not exist on the island? If they took all of Thurston's money and distributed it to everyone else would they be better off in any way? Standards of living rise because productivity per worker wises, which is the result of capital investment and accumulation, not by redistributing money.

The "collusion and market rigging" are myths. The price of steel, kerosene, and other goods that the "robber barons" ruled during the latter part of the 19th century saw production skyrocket and prices FALL. Rockefeller brought the price of Kerosene down around 90%. Sure he drove a great many of his competitors out of business, but the average person benefited by now having a cheap fuel for illumination. Any attempts at collusion quickly fell apart because in a voluntary cartel, someone will soon start cheating and the whole system falls apart. Only TWO cartels have had any lasting impact or power without government support, the DeBeers diamond monopoly and the New York Stock exchange. Even OPEC can't permanently affect prices because all the member states have cheated on their quotas at one point or another. (BTW, the 1970's oil crisis was caused by US government price controls on oil, not OPEC. Had prices been allowed to rise slightly there would have been no shortages.) It is only by an overarching central government that cartels can last for any length of time.

As for violence against the workers, when you take stuff that isn't yours, I would hope that someone comes to crack your skull. Frequently, as in the Homestead strike, the workers had taken property that wasn't theirs and were the ones who first opened fire on the Pinkerton agents, whose assigned task was to simply secure the factory for the owners.

You also neglect the violence brought upon workers by the labor unions. Workers whose only crime was accepting terms of employment that the Union workers had rejected. If you won't fix PCs for less than $35 an hour and I will do it for $30, what right do you, or a Union, have to prevent me from freely agreeing to a contract that you, or the Union, had rejected?

Problems like company housing and the company store were temporary problems, partially resolved by the invention of the safety bicycle and completely solved by the mass produced automobile, which gave workers the ability to chose from dozens of employers instead of just the one within walking distance.

Nobody bothers responding to you on these issues anymore because these facts have been pointed out to you repeatedly and yet you continue blathering on as if nothing has happened. I really need to set up a "copy/paste" to use because your arguments NEVER change no matter what evidence is provided. (and I HAVE given far more detailed responses to you.) You blame religious folk for being closed minded. How about taking a little look in the mirror?

Why is this news?

[poet]

SalesForce is a company. Their job is to make money for their share holders. If the management decides that they have overlapping roles then it makes sense to retire those roles. I am sure they have a policy to hire within first, people can always reapply if they like working for the company.

Re:Why is this news?

[Mad Bad Rabbit]

SalesForce is a company. Their job is to make money for their share holders.

That attitude has been destroying the U.S. economy since the 1970's. The priorities of any sane company should be:

1. Provide a good or service that delights customers
2. Make enough money doing it to pay your vendors and employees fairly
3. Reinvest most of the profits in ways that will provide long-term benefit (capital upgrades, employee training, etc.)
4. If you are publicly traded, pay shareholders just enough that they don't dump your stock

If SalesForce were focused on the first three, then unless they're already at 100% market saturation, they could find profitable new tasks for those workers.
They have chosen not to, because "shareholder value" is more important to them.

Re:Why is this news?

[chihowa]

Because if I pursue the first three options, I'll be probably be around (and still profitable) after next quarter.

To turn it around, why do I want you to invest in my company if you're going to bail after one quarter or pull your investment after one poor quarter? Maximizing shareholder returns is not a successful long-term strategy for profitability.

Aquisitions

[SpaceMonkies]

Look at their aquisitions:

Sendia (April 2006)[8] – now Force.com Mobile
Kieden (August 2006)[9] – now Salesforce for Google AdWords
Kenlet (January 2007) – original product CrispyNews used at Salesforce IdeaExchange[10] and Dell IdeaStorm[11] – now relaunched as Salesforce Ideas
Koral (March 2007) – now Salesforce Content
Instranet (August 2008) – now re-branded to Salesforce Knowledge
GroupSwim (December 2009) – now part of Salesforce Chatter
Informavores (December 2009)[12] – now re-branded to Visual Workflow
Jigsaw Data Corp. (April 2010),[13] – now known as Data.com
Sitemasher (June 2010) – now known as Site.com
Navajo Security (August 2011)[14]
Activa Live Chat (September 2010) – now known as Salesforce Live Agent[15]
Heroku (December 2010)[16]
Etacts (December 2010)[17]
Dimdim (January 2011)[18]
Manymoon (February 2011) – now known as Do.com[3]
Radian6 (March 2011)[19]
Assistly (September 21, 2011) – now known as Desk.com[20]
Model Metrics (November 2011)[21]
Rypple (December 2011)[22] – now known as Work.com
Stypi (May 2012)[23]
Buddy Media (May 2012) for US$689 million[24][25]
ChoicePass (June 2012)[26]
Thinkfuse (June 2012)[27]
BlueTail (July 2012) – now part of Data.com[28]
GoInstant (July 2012) for US$70 million [29]
clipboard.com (May 2013) for US$12 million [30]
ExactTarget (announced June 4, 2013) for US$2.5 billion[31]
EdgeSpring (June 7, 2013)[32]
-- http://en.wikipedia.org/wiki/Salesforce.com#Acquisitions

I can see why they need to 'reduce overlapping roles'!

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dead weight

[schematix]

It is quite normal that after a company has grown and hired more and more employees, that the time comes to get rid of those employees who didn't contribute the value that they are paid for. As uncomfortable as it is for someone to lose their job, most of the times it's not the productive people who are being let go - it's the dead weight. Truly good employees are hard to come by so if you happen to just be in the wrong place at the wrong time then it sucks, but you won't have a hard time finding a new job. Even in a less than stellar economy really good talent is always in strong demand. If you are incompetent, all bets are off and good luck to you.