Salesforce.com To Cut 200 Jobs Despite Its Expectations To Make More Money 156
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."
Business tries to increase profits, new at 11 (Score:5, Insightful)
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: (Score:3)
Re:Business tries to increase profits, new at 11 (Score:4, Insightful)
But with the special caveat that more tax cuts on those profits will make them hire more people.
Re: (Score:2)
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.
Re: (Score:2)
I don't disagree, but I'd prefer this point to be made with substantially less patronizing.
Re: (Score:2)
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: (Score:2)
Re: (Score:2)
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: (Score:2, Insightful)
Re: (Score:3, Insightful)
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 t
Re: (Score:2)
Re: (Score:3)
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: (Score:2)
Re: (Score:2)
I think you missed some sarcasm there, my good friend.
Re:Business tries to increase profits, new at 11 (Score:4, Insightful)
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: (Score:2)
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
Re: (Score:2)
Have you forgotten that companies used to train their employees?
Re: (Score:2)
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 opportu
Re: (Score:2)
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
Re: (Score:2)
Businesses want everything for free, just like everyone else. Unlike everyone else, they're sociopaths, so they are absolutely ruthless in pursuing that goal.
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 s
Re: (Score:2)
Re:Business tries to increase profits, new at 11 (Score:5, Insightful)
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: (Score:3)
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 w
Re: (Score:2)
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 evide
Why is this news? (Score:4, Insightful)
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: (Score:3)
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: (Score:2)
Re: (Score:3)
Re:Why is this news? (Score:5, Insightful)
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: (Score:2)
On a side note, Salesforce is hiring in Mexico. I am sure it is totaly unrelated.
Re:Why is this news? (Score:4, Insightful)
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 (Score:5, Informative)
Re: (Score:2)
sorry dude, used last mod point this morning
Re:Revenue is not the same as earnings (Score:5, Informative)
Re: (Score:2)
And in plain English?
Aquisitions (Score:5, Insightful)
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 [wikipedia.org]
I can see why they need to 'reduce overlapping roles'!
Check out the new Slashdot iPad app [apple.com]
Re: (Score:2)
Re: (Score:2)
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 Str
Re: (Score:2)
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.
dead weight (Score:4, Insightful)
Re: (Score:2)
Corporate Welfare (Score:4, Interesting)
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: (Score:2, Interesting)
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,
WRONG - Tried of this (Score:3)
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.
Gaining synergy (Score:2)
Revenue is not profit (Score:3)
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.
Companies are not job-creators (Score:3)
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: (Score:2)
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... (Score:2)
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: (Score:2)
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 (Score:2)
This seems appropriate (Score:2)
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 incomp
Re: (Score:3)
Which is sometimes still better than giving several people the job of one person.
Re:Go ahead (Score:5, Insightful)
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 (Score:5, Insightful)
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 (Score:4, Informative)
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: (Score:3)
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: (Score:2)
Actually, Synergy [thefreedictionary.com] doesn't mean that at all. That being said, they did in fact use the word correctly.
Re: (Score:2)
Actually, Synergy [thefreedictionary.com] 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: (Score:3)
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.
Re: (Score:2)
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: (Score:2)
Re: (Score:2)
Re: (Score:2)
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: (Score:2)
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: (Score:2)
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 al
Re: (Score:2)
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: (Score:3)
so you fire half of them and make the other half pull ~1012 lbs, yup sounds like time to raise revenue forecast...
yayyy
Re: (Score:2)
BTW didn't mean you as in jellomizer
Re: (Score:2)
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: (Score:2)
Re: (Score:2)
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.
O
Re: (Score:2)
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. I
Re: (Score:2)
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 [slashdot.org]
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: (Score:2)
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 (Score:4, Insightful)
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: (Score:2, Interesting)
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
Re: (Score:2)
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: (Score:2)
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 examp
Re: (Score:2)
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
Re: (Score:2)
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: (Score:3)
Re: (Score:2)
Re: (Score:2)
Business exist to provide a good or service that benefits society. If it can do that with no employees, so much the better.
Re: (Score:2)
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: (Score:2)
Re: (Score:2)
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: (Score:2)
Re: (Score:2)
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 th
Re: (Score:2)
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
Re: (Score:2, Interesting)
How many of the 200 chosen will be the ones with higher salaries and only 2 years to go until retirement?
Re: (Score:3)
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 t
Re: (Score:2)
None (Score:2)
Re: (Score:2)
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: (Score:2)
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: (Score:2)
Re: (Score:3)
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: (Score:2)
Re: (Score:3)
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