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

[buddyglass]

If they can cut those positions without impacting productivity (which they apparently think they can do) then why do you object? Should they keep folks on the payroll who aren't adding any value to the company? One needn't be a corporate sycophant to argue that employers should be free to let employees go who are no longer needed.

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.

Re:Go ahead

[Notabadguy]

Actually, salesforce.com isn't really for outside sales / door to door salesmen.

I don't know who all their customers are, but I used to work for Ricoh, and now work for GE; the sales communities at both companies use it.

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.)

Re:Go ahead

[tnk1]

I agree with your point.

I would say, though, that it might be nice or useful to see if they can make use of some of those employees for internal positions that will be opening up as Salesforce grows. I realize, this is not going to be possible for some, or even most of those jobs, but it is also an efficient practice to keep people on who you don't have to go through the full hiring process to locate and vet.

Re:Go ahead

[runeghost]

1) Morale 2) Loyalty 2) Because it's cheaper in the long run to keep experienced staff around for when you do grow. Businesses exist because we, the body public, choose to let them exist in order to provide a net positive contribuition to our society. Any business that has no reasonable expectation of being good for society, now or in the future, should be eliminated.

Re:Go ahead

[runeghost]

That should be: 1) Morale, 2) Loyalty, and 3 experience et al. That's what I get for not using preview. :P

Re:Go ahead

[Archangel Michael]

Synergy means "getting more from what you have". It doesn't require cutting as a result. In fact, the two are not even related, directly. However, because you can do more, you might not need those people any longer. It happens.

This is a non-story.

Re:Go ahead

[Anonymous Coward]

How many of the 200 chosen will be the ones with higher salaries and only 2 years to go until retirement?

Re:Go ahead

[ShanghaiBill]

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.

In a large company, the person that makes a decision, and the person that justifies the decision to the public, are two different people.

If they really did not need them then why did they hire them in the first place?

I have hired, and later fired, plenty of people over the years. Hiring good people is hard, and some mistakes are unavoidable. So periodic pruning is needed. This is good for the company, and, in the long run, better for the employees as well because they will find a new job that is a better fit to their abilities and offers a greater potential for career growth. Some countries, including many in Southern Europe, have passed laws to discourage this employee churn, and the result is economic stagnation as profits and productivity fall.

Re:Go ahead

[daem0n1x]

It's called capitalism. Love it or leave it.

Re:Go ahead

[jellomizer]

Haven gotten my MBA, I have learned the meaning of the word Synergy, (then told to never use it as it has been over used to a point where it is just sounds stupid to say it)

In essence if you are working in a team the sum of what all the members together create is greater then what each individual can do by themselves.

In real life this doesn't happen so much. Usually when you work in the group the result of the group is less then the sum of each individual.

Lets say we use a game of Tug of War.
Each person alone can pull 450 newtons, and you have a team of 10.
Synergy would happen if together they can pull 4501 or more newtons of force.
What normally would happen is that they pull less then 4500 newtons of force because seeing the other people they will not try as hard.

Re:Go ahead

[tnk1]

Synergy seems like an almost too simple concept to me, and that's why I think it gets read as being "content-free" or "marketing speak". While it is marketing speak, it really is just a term that describes what positive effect that you get from a partnership or an acquisition in relation to the strengths of your own organization. If you acquire a company, you need to identify where you can find synergy and then ensure that you incorporate that successfully. If you don't, the merger or partnership fails.

Once synergistic effects, and necessary components are identified, you make sure that you maintain enough support to handle the increased demands of the merged organization. However, since most companies have departments or positions that are required only if they are independent organizations, then you have redundancy which is usually where you cut to maintain efficiency.

Find synergy, calculate new supporting requirements, eliminate redundancy. And sometimes, even add new positions or assets if your synergy has a multiplicative effect on some part of your business. Synergy as a term can be vague, because synergistic effects will vary on the type of businesses you are dealing with, but I think it is useful as a placeholder for the specific effect involved, which again, may only be obvious to people in the business itself.

Moving to your point, though, it is a fair and good question to ask specifically what effects are expected to provide synergy. That said, many companies do specify those details to investors and in various documents which they produce outside something like an earnings call. Checking the documentation they they file with the SEC, for instance, might yield some information.

Here's hoping that those who are getting laid off were given good packages and that they find themselves employed again as soon as possible. Having had that done to me in the past, I know what a difference a good separation can make in the process of keeping your life together. Cutting redundancy is a legitimate business practice, but it sucks to be on the receiving end of it.

Re:Go ahead

[Zero__Kelvin]

Synergy means "getting more from what you have"

Actually, Synergy doesn't mean that at all. That being said, they did in fact use the word correctly.

Re:Go ahead

[Zero__Kelvin]

"Haven gotten my MBA"

What College did you go to that gives MBA degrees to people without requiring them to have a basic grasp of the English language?

Re:Go ahead

[IANAAC]

Actually, Synergy doesn't mean that at all. That being said, they did in fact use the word correctly.

The replies so far are kind of making my point: The word means whatever the person using it wants it to mean, whether it's a standard dictionary definition (not really helpful - anyone can grab a dictionary for a snap response) or their own misguided interpretation.

That said, I don't believe the word "synergy" and Salesforce's actions (the many, MANY acquisitions they've gone through being an example) match up.

Re:Go ahead

[phantomfive]

And a consequence of this (still perfectly reasonable) position is widespread poverty, starvation, and so on.

Widespread poverty, starvation, death, and so on, are a consequence of life. That stuff happened long before capitalism or government existed, and there has never been a good general solution.

There's a huge argument over whether 'government is the problem' or whether 'corporations are the problem.' I won't settle that here, but sometimes neither is the problem. Sometimes the problem is that life just sucks.

Re:Go ahead

[Zero__Kelvin]

"The replies so far are kind of making my point: The word means whatever the person using it wants it to mean, whether it's a standard dictionary definition (not really helpful ..."

Well, if you live in a world where definitions in the dictionary don't mean anything, and anyone can make up whatever they want for a definition, then you are correct. Personally, I live on planet Earth.

"That said, I don't believe the word "synergy" and Salesforce's actions (the many, MANY acquisitions they've gone through being an example) match up."

They have two divisions which they are merging. They are eliminating redundant positions as well as overhead so that their cash outflow is reduced. Assuming they continue to be as profitable, how does that not fit the definition?

Re:Go ahead

[zlives]

so you fire half of them and make the other half pull ~1012 lbs, yup sounds like time to raise revenue forecast...

yayyy

Re:Go ahead

[zlives]

BTW didn't mean you as in jellomizer

Re:Go ahead

[Zero__Kelvin]

It doesn't involve truthiness at all. (You didn't know it has been accepted into the common lexicon, did you?) I do, however know what point you were trying to make, I think. However, since synergy is not a new word it also has a definition which one can easily look up. That being said, bogus definitions (4) do sometimes make it into the common lexicon. However, there is no issue with that here, as there is no ambiguity in the common lexicon.

Re:Go ahead

[nine-times]

I keep trying to tell people: Companies don't just look at how much available money they have and say, "Hey, we can hire more people!" They look at the base minimum of people they need to employe before they can't provide their service (or manufacture their product), and they hire that many people. They make their profits by *not* hiring more than they need to.

And I don't point this out to defend the behavior of businesses. I point this out so that people understand the fault in the logic when they're told, "The best way to boost the economy is to give tax breaks to 'job creators'." You give more money to 'job creators' and they pocket that money. They don't suddenly hire more people because they have money.

Re:Go ahead

[davester666]

I believe the kind of synergy they were talking about increasing is the synergy between salesforce.com's bank account and the ceo's and other top executives bank accounts...

Because only they would think of firing people while the business is growing.

Re:Go ahead

[AcidLacedPenguiN]

mostly agree, but would it be in any way dishonest for them to take a significant government grant under the auspices of creating 300 jobs in the province (which they never did completely did) and then turn around and fire 100 existing employees just about 8 to 10 months later?

Re:Go ahead

[lgw]

Business exist to provide a good or service that benefits society. If it can do that with no employees, so much the better.

Re:Go ahead

[ranton]

Businesses exist because we, the body public, choose to let them exist in order to provide a net positive contribution to our society. Any business that has no reasonable expectation of being good for society, now or in the future, should be eliminated.

Businesses are good for society when they provide something of use to society. Jobs are a byproduct of their operation, not the actual reason for having a business. The more value a company can provide for the least amount of effort, the better the company is at being good for society.

By your logic, if a company started providing food to the entire world for free without needing a single employee beyond the CEO, it should be eliminated because it isn't creating any jobs.

Re:Go ahead

[dimeglio]

Depends how much I get paid to pull. My contribution to synergy is directly proportional to the cash being put in my pockets.

Re:Go ahead

[khellendros1984]

Well, if you live in a world where definitions in the dictionary don't mean anything, and anyone can make up whatever they want for a definition, then you are correct. Personally, I live on planet Earth.

Those two worlds are one and the same. Dictionaries document commonly-understood definitions and spellings of words, but no more than that.

For most words, dictionaries do a decent job of keeping up with their meanings, but it's not true in all cases. Regardless, definitions in the dictionary mean about as much as comments in code: You hope they're up to date, and you use other information (like context) to decide if they aren't.

Re:Go ahead

[Zirbert]

In essence if you are working in a team the sum of what all the members together create is greater then what each individual can do by themselves.

In real life this doesn't happen so much.

In practice, groups work at the speed of the slowest member and at the intellectual level of the dumbest.

I've watched buzzword-spouting HR drones running workshops and trying to get people to demonstrate syergy. It's good for a laugh, until I remember that the HR drone probably makes more than I do, at which point I get deeply depressed.

Re:Go ahead

[Zero__Kelvin]

Really. So I can use the word flat to refer to the Earth and everyone will know I mean flat as in spherical! It can mean anything I want! Thanks khellendros1984 ! You're an idiot! (by which, of course, I meant genius)

Re:Go ahead

[hkmwbz]

If they really did not need them then why did they hire them in the first place?

Didn't they merge different products/companies? If so they will have lots of overlapping positions which doesn't make sense at all.

They hired them because they had different products/teams. When those were merged, some people were no longer needed.

Simple, really.

Re:Go ahead

[LordLimecat]

Synergy AFAIK is when you have tools, devices, or people who work in such a way as to be force-multipliers for each other. An example commonly comes up in MOBA games, where a character might have an attribute that causes their crititical strikes to deal bonus damage. In that case, boosting their critical strike percentage would provide synergy: the two attributes work together to create a result greater than the sum of the individual parts.

A real-world example would be a team with a competent manager. Individually, the X team members could accomplish X * Y work, while the manager alone could accomplish Y work. But the team working with the manager could perhaps accomplish 2 * X * Y work -- the manager acts as a force multiplier by triaging issues as they come in, directing team members to resources that they require, handling administrative overhead, etc. (In reality of course, X workers often do not perform Y work, but a good manager can mitigate some of the inefficiency).

Re:Go ahead

[LordLimecat]

Once again, if they can continue to be as successful with fewer employees, by what logic are you promoting that they be inefficient in job assignment?

Salesforce making money isnt a bad thing, however derogatorily you try to frame things. Its a little absurd that success is now seen as a vice.

Re:Go ahead

[LordLimecat]

Sounds like the team was slacking, and you just raised the efficiency of the entire team.

Again: are you crying out for more inefficiency so that more jobs can be created? Perhaps the Panama canal should have been dug with spoons, as well: that would have created a LOT more jobs!

Re:Go ahead

[LordLimecat]

Any business that has no reasonable expectation of being good for society, now or in the future, should be eliminated.

Private entities dont exist by the benevolent graces of some tyrannical "society", and its sort of scary that you would frame it as such in your mind.

Its a pretty fundamental freedom for me to decide to make a living selling tents, and for you to choose to be a patron. Society as a whole has no place determining that my tents do not house enough homeless people and that I no longer have the right to run a business.

Do try to remember that society exists for individuals, not the other way around; we arent the borg, and individual rights are sort of the cornerstone of most western societies.

Re:Go ahead

[LordLimecat]

The country where Salesforce is based has no significant incidence of starvation or anything resembling poverty. I dont think you can pin poverty on the actions of businesses; it is 99% of the time because of government action that poverty exists.

When companies like Salesforce come in, the standard of living and wages go UP; its absurd that people demonize successful businesses like this.

Re:Go ahead

[AlphaWolf_HK]

The answer to #2 is rather simple: It's quite possible that they've changed their business process in such a way that these positions are no longer required.

1. IT in particular has a funny way of making many non-IT related jobs irrelevant. For example, a new invoicing system might make it so that they need fewer accountants.

2. Of course there's outsourcing, and by that I am not referring to offshoring. Any job anywhere can be outsourced to another company - and that typically happens domestically. For example, they might have fired some janitors and hired some other company to do it because they can either do it better, cheaper, or both.

3. A close relative of 2 is when a company stops doing a certain business function in-house and the company that they are going to contract with hires them instead.

In some SEC filings you can at times see all three of these listed as simple reduction in workforce.

I know how much slashdot hates the word outsource, but most of time doing so only makes sense for the same reason that you'd hire a plumber to replace an old toilet than to simply do it yourself. The plumber is specialized in it and probably knows how to do it better than you do. Only in this case, everybody in the firm, from management on down, knows the business better and since they are more specialized and presumably operate in that particular area on a larger scale, they can operate more efficiently. As far as offshoring, comparative advantage is why we work on a global economy these days, and why in spite of some jobs (e.g. textiles) almost being non-existent here, we're all wealthier today - all of us, including the poor in all countries involved in the transaction.

And by the way, in response to another post: This is synergy in action.

Re:Go ahead

[AlphaWolf_HK]

My first response to that question would be to describe what I did in my last paragraph here:

http://slashdot.org/comments.pl?sid=4149031&cid=44721647

You don't need to be a manager (I'm not) to understand what that is, you just have to simply understand business, which sadly many of the "I wonder where my CS job went" types fail to do, which is why they don't have a job.

Re:Go ahead

[luis_a_espinal]

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.

What choice does the company has but to use flowery language? Firing people is never a nice experience, and it can be a PR nightmare. So you find ways to shower flowers over it. With that said, and in this context, "synergy" typically means greater integration of groups and departments that until now had overlapping roles and functions, some of them acting as silos preventing efficiency. Whether that is/was the actual state of affairs, that's another thing.

2. If they really did not need them then why did they hire them in the first place?

Because at one point they needed them and now they don't? I mean, it's not fucking rocket science. You might have become better at doing things which imply you use less people for the same tasks you were doing before with more. Or you find that some line of business are not as profitable or needed anymore, so you cut them off. Or you had a projected need of workforce that never quite materialized. Or you had a spike in your backlogs that necessitated having extra people that you no longer need once your backlog is cleared.

Work and business do not occur in a never-changing vacuum. Things change. Shit changes.

This hire - fire mentality really does just make companies look incompetent.

No. Thinking that you can fix the number of people you need in time and space as if economic conditions were universal constants, that makes you look incompetent and clueless.

Seriously. It. Is. Not. Rocket. Science. 3. Its just a company to help dip shit salesmen darken my door so who really gives a shit anyway.

Re:Go ahead

[Memroid]

why did they hire them in the first place?

They didn't hire these people; they bought companies for their technologies, brands, etc. and then got rid of the extra employees.

Re:Go ahead

[runeghost]

Private entities in general? No, of course not. Private entitites that are treated as people, yet get special treatment under the law should absolutely only allowed to exist at society's sufferance.

To take your example, of course you ought to be able set up a tent selling business should you so choose. But if your tents turn out to be made of readily flammable cloth that ends up killing a significant number of your customers when they burn down, then any personal insulation from liability for the deaths you've caused does indeed come at the sufferance of the general public.

Re:Go ahead

[runeghost]

Exactly. Jobs are a cost we (both individually and collectively) pay in order to have 'good stuff'. If all a company does is acquire wealth for its owners, without providing any public benefit, why the hell should it continue to exist? The difference between a company that does nothing but enrich its owners and a bandit gang is a legal technicality, nothing more.

Re:Go ahead

[ranton]

If all a company does is acquire wealth for its owners, without providing any public benefit, why the hell should it continue to exist?

Any company that does not provide any public benefit would crumble almost immediately. If they aren't producing anything that are valuable enough to society for people to pay for, how do they stay in business?

Re:Go ahead

[runeghost]

Rent extraction and fraud.

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

[gfxguy]

Agree... the most profitable companies in the world don't employ people just to keep them employed, the employ the workforce they need. Just because earnings go up doesn't mean they require the workforce they had.

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

[i kan reed]

I don't disagree, but I'd prefer this point to be made with substantially less patronizing.

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

[gfxguy]

WTF? There's no corporate love here, there's just reality - would you keep paying twice as many people as you need to cut your lawn just because you could afford it? Moron. Nobody is arguing corporations don't do crappy things sometimes; this just isn't one of them.

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

[Xest]

Especially the comment near the end about cutting jobs when they merged two companies.

I mean what, is whoever wrote that piece of turd suggesting that if you merge two companies you should just retain two HR departments, two finance departments, or merge them and have one big bloated oversized mess?

If anyone thinks you should keep all jobs when you merge two companies then they're kind of missing the point and wont get very far in life. Merging companies or even departments to cut redundancy is a standard way of increasing efficiency. I mean what, are you supposed to have two receptionists sat on front desk filing their nails instead of just one? Two IT managers fighting over power of one network? Two CEOs fighting over the best way to run said company? Two janitors so you can have the toilets cleaned twice as fast leaving them nothing to do for the rest of the day?

Re:Business tries to increase profits, new at 11

[DuckDodgers]

Right. Sometimes a company cuts needed staff because the executives, or the shareholders pulling the executives' strings, are putting short term profitability over long term sustainable income. And sometimes a company cuts staff because the staff are redundant.

And there's no simple rule of thumb for deciding which is the case for any given set of layoffs. I'm inclined to mistrust SalesForce.com's leadership because I'm one of those liberal hippie socialist types - but I prefer to see reasonable evidence before I start banging on my "corporate greed" war drum. I have a hard enough time getting taken seriously as it is.

Re:Business tries to increase profits, new at 11

[h4rr4r]

Please explain.
Why in the world would you hire employees you don't need if there was a tax cut?

This sound like tired old incorrect supply side economics.

Re:Business tries to increase profits, new at 11

[gfxguy]

People don't get it - if a company could expand with the money it "saved" from tax cuts then that's entirely different than hiring people they don't need because they got tax cuts. Besides, even the CBO came out and said that corporate taxes are mostly burdens on consumers and employees, not the companies - where do you think the companies get the money to pay taxes? It's just hidden/embedded in every product and service you pay for.

Re:Business tries to increase profits, new at 11

[i kan reed]

I think you missed some sarcasm there, my good friend.

Re:Business tries to increase profits, new at 11

[Archangel Michael]

All taxes are regressive. They hurt the lowest people in the economic scale the most, even when they are not targeted. Which is why ALL taxes should be completely transparent and "voluntary". Taxing necessities (income being one) is evil.

Re:Business tries to increase profits, new at 11

[h4rr4r]

Those are two different things.

If a company could expand it would. Tax cut or no.

I am not refuting that, merely pointing out that supply side economics does not work. No one will hire more people because they have extra money, extra money is called profit.

Re:Business tries to increase profits, new at 11

[bluefoxlucid]

It's more complex than that. Tax cuts are sweeping and wide across sectors and entire economies. They universally give all businesses affected the ability to modify operations more fluidly. Typically this means multiple businesses in a sector will have a greater strategic ability to out-compete their competitors, and so should probably do something about that.

When a single business in a stable market has no specific pressures, it can choose to continue operating stable and slim down; or it can expand. When expansion is enforced by large market movements (like wide tax cuts), a business must leverage its fluidity (at least enough to stay fluid rather than re-solidify) or it will die. Leveraging usually brings more jobs.

Economy is complex.

Re:Business tries to increase profits, new at 11

[gfxguy]

That's what I'm saying... if you want to expand but can't because of lack of resources, then if your burdens are reduced (freeing resources), you would use those resources to grow... but you don't grow just because you have resources if there's no point to it.

Re:Business tries to increase profits, new at 11

[dkleinsc]

The problem is finding people with skill sets and costs aligned to what the business needs.

If you can't find that, though, the solution is:
1. Be willing to take on a higher cost for the person with the right skill set. For example, you might have to pay a higher salary than you would have liked, or pay to relocate someone to your area.
2. Take someone who has close-to but not exactly the right skill set and train them. This is obviously a bit risky, but can also be highly rewarding if you find the right person.

And of course, once you found them and hired them, you have to keep them. Some good ways of doing that include: raises, a clear promotion path, reasonable hour expectations, a nice office, profit sharing or stock option programs, flextime, option to work from home instead of in the office, and nice long vacations.

Re:Business tries to increase profits, new at 11

[Anonymous Coward]

Considering they got charity from at least one provincial government (New Brunswick) to create jobs they probably should hold up their end of the deal.

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?

Re:Business tries to increase profits, new at 11

[Hatta]

Have you forgotten that companies used to train their employees?

Re:Business tries to increase profits, new at 11

[Anonymous Psychopath]

Have you forgotten that companies used to train their employees?

Companies still do, or at least the ones who've figured out that recruiting new talent is more expensive than training existing employees. The problem is that the skills companies need are changing more rapidly than before, and not everyone is willing to continuously learn. For example, there are a good number of PBX technicians who have an incredible wealth of knowledge, but only about a type of system on the decline. I have personally observed many of them not just ignoring, but actively resisting opportunities to learn about newer voice transport technologies. Their way is better, and the world is wrong. This is a terrible scenario for both the company and the employee. I've watched this type of thing play out over and over again during my career.

Re:Business tries to increase profits, new at 11

[luis_a_espinal]

Have you forgotten that companies used to train their employees?

Companies still do, or at least the ones who've figured out that recruiting new talent is more expensive than training existing employees.

And those are few and far between. I noticed this shift of pushing training costs to employees (now contractors) started in the late 90's/early 2000's. It started after the subtle change of renaming "Personnel" Departments into "Human Resources" Departments.

With the exception of good engineering firms or defense contractors, you will not get training reimbursement or in-house training anymore. It is the status quo. It has been for more than 15 years.

We, software/engineer professionals simply have to be more diligent and disciplined about getting trained out-of-pocket. Those golden years of getting trained by our employers, that good shit ain't going to come back.

Re:Business tries to increase profits, new at 11

[ultranova]

The problem is finding people with skill sets and costs aligned to what the business needs.

Businesses want everything for free, just like everyone else. Unlike everyone else, they're sociopaths, so they are absolutely ruthless in pursuing that goal.

This isn't some sort of emotional worship of business.

Really? If I complain I can't get a mansion at the cost of a doghouse, what will your response be? Yet when a business says it can't get the employees it wants for what it's willing to pay, that warrants a serious discussion about how to lower wages.

That's how trade worked before we invented currency.

No, that's how slavery worked: "work at the price I'm willing to pay (nothing) or I'll make you".

Re:Business tries to increase profits, new at 11

[NewYork]

Unlike in Capitalism, Globalization demands you to be an 'Highly Skilled Wage Slave' to retain a job

Re:Business tries to increase profits, new at 11

[hairyfeet]

OMFG, did you just DEFEND the age of the robber barons as a GOOD thing? To use a line the libertarians are fond of i bet you thought slavery was great, what with zero unemployment and all.

The ONLY ones who gained from the age of the robber barons WAS the robber barons, the rest got to drink polluted water, have everything in their lives controlled by a handful of uber-rich (who owned the railroads, oil,cattle, and pretty much anything else of value) and got to enjoy being enslaved. "I owe my soul to the company store" ring any bells?

But like most of the libertarian extreme right the ONLY thing you can do is insult, because the facts? really not on your side. ironically the libertarians rail against the "ebil gubmint" when in reality those regulations you hate? guess who bought them? The ROBBER BARONS! Look up "regulatory capture" and try actually reading up on the Rockefellers and Morgans and I think you'll find they were NOT nice people. Ironic that you would defend them when if you don't have at least a mil five in the bank they wouldn't have pissed on you if you were on fire, but living in the south and seeing Romney signs outside tarpaper shacks I'm used to dealing with the batshit crazy.

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?

[radiumsoup]

because if it's presented at news, then the anti-corporate knuckledraggers can spin their Wheel of Blame to point to the "story" as an example of [insert result from wheel of blame here].

This week's spin seems to have landed on "greed".

Re:Why is this news?

[mreed911]

This assumes that the 200 redundancies are the types able to pioneer new technologies, which isn't likely the case given the nature of the merger.

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?

[bluefoxlucid]

New technologies like what? Getting other businesses to hire more people than they need and create more redundant jobs in other sectors?

Re:Why is this news?

[betterprimate]

On a side note, Salesforce is hiring in Mexico. I am sure it is totaly unrelated.

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.

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

[alen]

sorry dude, used last mod point this morning

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:Revenue is not the same as earnings

[UnknownSoldier]

And in plain English?

Re:Revenue is not the same as earnings

[kubajz]

Plain English: Although their revenue has grown, they are still making losses. It may seem, from a certain point of view, like they are earning a bit of profit for each of their shares, but that's only if you adjust the figures in a way that is not allowed by official accounting standards.

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'!

Check out the new Slashdot iPad app

Re:Aquisitions

[Xaedalus]

I suspect that they've reached maturity in their market, and are buying their innovation rather than developing it in house. I'm starting to wonder if Benioff and the Board have decided to run Salesforce as a cash cow. They invest little-to-nothing in internal R&D, purchase all the start-ups that are going in a direction that the market seems to favor, and keep workforce to an efficient minimum. It would make sense, especially if they've reached the limits of easy growth and now new revenue/customers are hard to come by.

Re:Aquisitions

[NeutronCowboy]

Exactly right. Specifically the ExactTarget acquisition has resulted in a shit ton of people becoming Salesforce, quite a few with positions that were already filled on the Salesforce side. Acquisitions are always bad for the same set of people: HR, accounting, and frontline support.

That said, Salesforce has been struggling with one thing: getting the "market" to raise the stock price. SaaS companies feel traditionally undervalued, and are doing all kinds of weird gimmicks to boost the numbers that Wall Street looks for when making stock purchase recommendations. We'll see if Salesforce falls into the same traps.

Re:Aquisitions

[Princeofcups]

What do all these companies do? Either they have some customers that Salesforce wants, or they have a "technology" that they want. Where "technology" is just some code that has to be completely rewritten to work with the existing Salesforce code. This to me looks like a company out of control.

Re:Aquisitions

[Anonymous Coward]

What do all these companies do? Either they have some customers that Salesforce wants, or they have a "technology" that they want. Where "technology" is just some code that has to be completely rewritten to work with the existing Salesforce code. This to me looks like a company out of control.

Or they it was thought they might disrupt the market in which Salesforce operates.

By way of analogy, if there were one single cross-country multi-billion-dollar cab company, would it not acqui-hire Uber today (or better yet, two years ago when it was only operating in one or two cities), just to shut down potential competition before it threatens their business model? Most founders and all VCs are fine with that, because the goal was to make money.

To put it another way, the founder who doesn't sell his company is risking millions to make billions, or is simply driven by ego instead of money. Most such founders end up broke, their employees fired, and their stock worth nothing, because very very few startups actually manage to disrupt their industries and push out their older competitors. For every Oracle, there's a dead Sun, or dying Informix or Sybase getting sold as a cash cow long past its prime, etc. The winners are the ones like Siebel, who sold out at near-peak valuations, even knowing it meant Larry walking in and rm -rf'd the disks.

Synergy

[Anonymous Coward]

Let's call it what it is: a euphemism for "giving one person the job of several people."

Re:Synergy

[SJHillman]

Which is sometimes still better than giving several people the job of one person.

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.

Re:dead weight

[schematix]

I doubt it's 'one fell swoop'. Companies don't just eliminate positions for the sake of it. It's not in their benefit to eliminate useful people and positions. There is careful thought given to each cut to see whether or not it is aligned with current needs. Quite often with acquisitions there is overlap in basic roles such as HR. You don't need 1 HR person from each company. That role can typically be filled by one to a few people in corporate. Even if they have familiarity with the company it doesn't make sense to keep them on because their expertise is in HR and they can better be utilized by someone else. Often times these 'cuts' are unfilled open positions too. So they close the job and someone really isn't losing it.

Re: Synergy is a start

[x181]

I understand that the word may be abused, but even I have used the word 'synergy' to describe what I'd hope for when joining a new team of engineers - I'd want a well organized, cooperative team of people to work with. I guess it's all about the context.

Re:These 200 jobs:

[alen]

what part of social media marketing don't you understand?

these are the guys who buy data from facebook and linkedin and then pester you to buy crap

Corporate Welfare

[Tridus]

This has been making a lot of news in Eastern Canada, because Salesforce (who bought local company Radian6) got a payroll grant from the government to go out and create 300 jobs with. ...

So naturally they cut a bunch of other jobs. The government has been scrambling ever since to not look like total morons for giving them money at all. Which is good, because corporate welfare schemes are always a ripoff for taxpayers and the only way it'll ever stop is if politicians start to get embarrassed for doing it.

Re:Corporate Welfare

[Anonymous Coward]

This has been making a lot of news in Eastern Canada, because Salesforce (who bought local company Radian6) got a payroll grant from the government to go out and create 300 jobs with. ...

I so dearly love when people (especially politicians) immediately make statements like that, implying that a company received a ton of money, without actually checking, you know, facts? If one bothers to read the news, it will become clear that _no money_ has been given at all. This is a grant based on various conditions, the essence of which appears to be that 300 long term jobs are created (and maintained) in New Brunswick over the next five years. It is actually still likely that those goals will be met, but if they are not, no government money will be spent. Source: http://www.cbc.ca/news/canada/new-brunswick/story/2013/08/29/nb-salesforce-radian6-job-cuts-1111.html

Disclosure: This is my personal comment, I work for Radian6 as a techie, but I have no actual knowledge of any financial details, beyond what I can read in the news like everyone else.

easy solution

[x181]

just throw more big data at it.

Seems normal

[Anonymous Coward]

When companies are merged, certain departments like HR and finance have duplicated roles that need to be handled somehow. Given the size of the companies acquired recently, this seems to be all this is. Move along...business as usual.

Gaining synergy

[K. S. Kyosuke]

I think I've finally deciphered the word: syn- means "together": -ergein is "to work". Therefore, "synergy" means "working people up en masse".

Revenue is not profit

[mc6809e]

Revenue is not profit. It's entirely possible to increase revenue while losing increasing amounts of money.

While I'm at it:

Wealth is not income.

"Literally" isn't for emphasis.

Feel free to add to the list.

WRONG - Tried of this

[brunes69]

This was covered in detail already the last time this happened. Payroll rebate programs have clauses to protect against this. They only get the money when they make their hiring numbers. They have not made those numbers so have not gotten a dime.

These layoffs suck for the region and I have close friends who have been directly affected, but mis-reporting the situation with false truths helps no one.

Companies are not job-creators

[asylumx]

I've said this before. Companies are not in business for the sole purpose of creating jobs. Creating jobs is a side effect of doing business. This business, as other commentators have pointed out, is eliminating unnecessary workforce because it will make them run more cleanly and ultimately end up with more profit. This should be indicative of what is likely to happen if you cut taxes for businesses -- they will add that money to their bottom line, but will continue only to hire new workers if they need to. That's why I don't buy it when politicians claim that corporate tax breaks will create jobs.

I know I'm off topic, and I don't think Salesforce.com is doing anything wrong here. Just sick of people claiming tax breaks will fix the economy.

Re:Companies are not job-creators

[asylumx]

That you would expect a company to blindly add extra income to the bottom line practically implies that you do not run a business.

If you want to make this personal, the fact you think cutting taxes would add INCOME to their bottom line certainly doesn't speak well for your expertise.

Salesforce is hiring...

[betterprimate]

Just not in the U.S. They offered me a position last week.... in Mexico.

But go on, wax poetic on free-market capitalism.

Re:Salesforce is hiring...

[betterprimate]

Just not in the U.S. They offered me a position last week.... in Mexico.

But go on, wax poetic on free-market capitalism.

Sorry for responding to my own post but I RTFA... This is a non-story. They cut redundancies after an acquisition. Happens all the time.

And they're have at least 675 available positions.

Yeah right

[dimeglio]

If income is increasing, cutting jobs typically means a company is unable/unwilling to diversify or unable/unwilling to add value to current services.

None

[rsilvergun]

now what are we going to do with all these people that we don't need to work thanks to 50 years of productivity gains? Right now the plan is to let them starve so they can depress wages and increase the share of wealth (and power) for 1% of the world.

This seems appropriate

[ReadParse]

Not only is this reduction in redundant staff probably appropriate, but this is one of the rare situations in which "synergy" is used in a non-lame, non-stupid way.

When two companies merge, the hope is that the two joined as one company will be more effective than they were when they were working together, but separate companies. Synergy is a reasonable word to describe that.

But unsurprisingly, that synergy does not always happen. You're combining two companies, with two different cultures, perhaps incompatible systems, perhaps conflicting ideals. And you're certainly going to have some redundancy. For example, in each company, you probably have one person ultimately in charge of technology. Now you have two, and have to work that out. You also have one person ultimately in charge of smaller things: The phone system, for example. Now you have two. These things have to be worked out.

A successful merger in which some people don't get laid off would be very surprising.