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> Considering they exceeded all analyst expectations for revenue and profits in the last quarter, it's safe to say that some of their effort is working.

> The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant

Kinda odd how you attribute them "beating the street" more to Mathew McConaughey's presence than the work output of 8 thousand employees. Can you elaborate on why this is so clear to you?

They have better metrics than random anti-corporate HNer who is typically clueless about accounting, marketing, lead-gen?

Don't you think that the ppl deciding to hire like crazies just to fire a year later should be accountable for that? They're clearly making bad decisions. It's just that someone else is expected to pay for them.

Those might be bad decisions for the employees, but those might be good decisions for the company.

Basically, scoop up talent while you can, then cut the lowest performers. It's basically the last step in a thorough interview process.

If you've ever worked somewhere where there's been layoffs, you'll know that of the remaining employees, all of the best people immediately start looking for jobs elsewhere. If management is so incompetent that they overhired or underperformed bad enough to lay people off, the writing is on the wall to jump ship. It can take years to repair the motivational and cultural damage caused by a layoff. Especially when paired with "soft" layoff behavior like mandating RTO and "performance" management.

Where is this magical "elsewhere" part where there would be no layoffs?

It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy

> Where is this magical "elsewhere" part where there would be no layoffs?

Any company with competent management. That includes not cargo culting layoffs while turning a blind eye to the damage they cause to a company.

> It's mind-boggling that we have raised a generation of people who are absolutely clueless about "Cost-of-Capital". It is worse than people not understanding democracy

What's mind-boggling is that people think the cost savings from a layoff happens in a vacuum. There are definitely repercussions in terms of loss of productivity, increased employee churn, brand damage, increased difficulty hiring in the future, loss of operational knowledge...

Layoff are a sign of mismanagement. That has nothing to do with the "cost-of-capital".

So you have never created a bug in your life? Made a mistake?

Your statement is as naive as "A Production Bug / Latency is a sign of Incompetent Software Developer" Should we fire you as soon as you hit the first bug?

BTW, You have a fundamental misunderstanding of Cost of Capital

Tomorrow if your salary is cut by 50%, would you cut-down on extra expenses? Is that a sign of mismanagement from you?

> Tomorrow if your salary is cut by 50%, would you cut-down on extra expenses? Is that a sign of mismanagement from you?

if you knowingly and willfully put yourself into a situation which resulted in your salary being cut by 50% then yes

It's still worth it to a apply for a job that pays double or take a job that pays double. It is only a personal failing if you misunderstand the risk and cost going in.

Similarly, if you gamble on a coin flip and lose, that doesn't mean it was a bad bet. It is only a bad bet if you calculate the odds and expected returns incorrectly. People seem to really struggle with this concept

I'm not sure if you replied to the right comment or not since I didn't say anything about firing engineers (or anyone).

My point is that over-hiring and layoffs aren't "good for the company" as the post I was responding to claimed. They're both a sign of bad management that incurs a cost on the company being poorly managed. One of those costs is that top performers leave as they are the first to recognize mismanagement.

I've definitely been through some layoffs where most employees said good riddance and moved on with life immediately, so I think there is definitely some variations in morale response.

It is one thing if the layoffs are at a startup running out of money, and another if layoffs are at a profitable company

That's not what Salesforce did. They cut longterm and high-performing employees, and we still have freshly hired randoms who know nothing.

Speaking here as an employee that was affected by layoffs in one of those companies that hired like crazy during the pandemic.

I see no problems in their behavior. The insane rate of hiring was useful to give a good boost to my salary in a couple of years.

Here's to hoping they go back at hiring like crazy again.

How many financially bad decisions you made in 2022?

Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision. Did you take responsibility and fire yourself as the primary bread-winner for your family? Why not?

Did you buy any high-growth tech stocks in 2021? If you did, that was a terrible decision.

Any idiot can arm-chair hindsight decisions

> Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision.

Meh. Securing financing in 20/21 was great but buying in 20/21 was kind of terrible.

Everyone I know who bought during that time period is now stuck for 30 years because over-extended and took a bath on property value, and a lot of them are already regretting that choice as life returns to normal and they realize life in the outer suburbs is kind of miserable (especially as they RTO).

Conversely, refinancing and leveraging cheap cash in 20/21, building a pile of powder, and then waiting until 2023-2024 to buy looks like a much better move. At least in my local market, either prices are down significantly or the seller can't afford a lower price and the inventory just sits on the market.

Real Estate from 20/21 appreciated 20-30%. With leverage you'd see 100%-200% returns. You can always sell now and realize that gain. At the end of the day, however you look at it, it'll be one of the stupidest financial decision you've made and you should take responsibility for it

The 20-30% appreciation is in specific markets. Definitely not all markets. Several housing markets are already down from 20/21 highs and lots of markets are trending downward.

Again, securing financing in 20/21 was great but buying real estate at those prices wasn't great relative to alternatives.

If a mortgage was you only way to get leverage in 20/21 then you should've taken out a mortgage. But if you had other ways to get leverage at the lower rates -- eg taking out a line of credit on existing real estate or borrowing against assets -- other options have been performing better and especially over the next few years will continue performing much better.

What if it went the other way? The strategy you described is a silly gamble that could have resulted in bankruptcy. Read the book Fooled by Randomness by Nassim Taleb for a treatise on why your thinking is wrong.

I read "Fooled By Randomness" 20 years ago :)

Your rebuttal, is exactly my point. Leaders make strategic bets all the time, especially in the tech world where you have to constantly take risks. Not all of them will come off and leaders have to shut-down / layoff people when bets fail.

I'm admonishing OP for cherry-picking the time when leaders made the wrong bet.

> Did you buy real-estate in 20/21 when the mortgate rates were 2%? If you didn't that's a terrible decision.

You need to make a good decision and learn more about the fact that what you pay for an asset (which is fixed forever) is typically much more important than the loan rate (which can be refinanced at lower rates). Also, overpaying for a house is a trap that cannot be unloaded no matter what the interest rate without bringing cash to closing while underpaying allows for an easy sale no matter how high the interest rate.

Who said that they weren't accountable? It's not just entry level employees getting laid off, but also senior ones, managers and executives. Salesforce got rid of 3 out of their 4 CEOs this year.

Those people should be accountable for that, sure. But Matthew McConaughey isn't accountable for that. We don't know the terms of his contract -- just that his contract was better than that of at-will employees (which, of course it was. The contracts for executives are also better than those of at-will employees...that's how this works) -- and we don't know what all was included as part of it.

But even if paying a celebrity $10 million for endorsements is a bad decision (and we don't know if it is or if it isn't -- it's probably a wash, as most marketing expenditures like this are), that decision is unrelated to why 8,000 people were laid off.

Is it very hard to believe that (1) some single digit % of employees (and even entire divisions) at a massive corporation – one that nearly doubled in size during the pandemic – aren't adding a lot of value and (2) a flashy marketing campaign can bring a company new customers?

8k of 25k is not some "single digit %"

u sound like u get paid for salesforce-pr

25k what? Salesforce had over 80k employees at the time of the layoffs.

Well all the numbers I've ever seen have been just shy of 80, and 8/80 = 10%, which is 2 digits. So there are two possibilities. One possibility, I guess, is that both your and parent are using some sort of counting system we'll call "base b" where 25 base b = 80 base 10 and in which 8/80 base b < 10% base b. The other, more likely, possibility is that you're intentionally under-stating the scale of the layoffs and being oddly defensive.

Enjoy your Salesforce stock grant, I guess ;-)

The base b here would be base 37.5 :)

8/25 is 32%, no?

25k is just what they hired during covid

The old joke is the marketing manager saying: "Half of all our marketing expenditures are wasted. The problem is we don't know which half."

In my years in business, it's nearly impossible to draw an accurate cause and effect line between marketing and sales. Too many other factors at work.

One thing I've noticed is that having competent and down to earth marketing folks also helps to boos overall morale at a company.

It does seem odd that companies would pay for services from Salesforce because of a celebrity quip, instead of a determination that said services would improve the company's operations.

Or perhaps these Marketing departments are just really good at internal marketing of budget usage?

That's not what marketing does. It doesn't influence the decision. Marketing makes sure your company is top of mind when the customer decides to make a decision.

To be fair though, that's influencing the decision that they make, at least averaged over many people.

Not just that. An effect of advertising I only understood later in life is that they give the company name recognition among all your peers.

E.g. BMW doesn't create car commercials just to get everyone to think about BMW when buying cars. They make car commercials to make sure everyone knows that BMW is expensive and good, so that driving a BMW is a signal that you're wealthy.

Similarly, Salesforce might want to make it clear that if you go with them, it's a "defensible" choice that you can easily explain to your boss.

We buy face creams and cars and sodas and everything else under the sun because popular celebrities tell us to. You can find it "odd" but it works.

It works for enterprise software? why so few companies do it then?

also even if we focus on the consumer market there are very successful companies which don’t spend any money on traditional marketing and don’t do ads at all.

> there are very successful companies

Naming a couple would make your claim more persuasive.

> It works for enterprise software?

Is not really a new marketing concept

https://www.youtube.com/watch?v=P0AJM6HMYjM

So are you saying, then, that you find it odd that marketing and advertising works? Nothing wrong if you do, I just wanted to be clear on that point.

how do you know it worked in this specific case though? maybe Salesforce would have done just as well financially and also saved 20 million or something like that without that ad campaign

And maybe it wouldn't have. But since I don't work for SalesForce's marketing dept, there's no way to tell.

No, I find it odd to spend that much cash on a celebrity endorsement when the target consumer audience (businesses) know that the celebrity is not a Sales Force customer:

"What the heck to Matthew McConaughey use SalesForce for ?"

  or more importantly:

"Why is SalesForce paying that kind of money when they could be investing instead in their abysmal support?" - as a SF/Tableau customer this is my perspective.

> Considering they exceeded all analyst expectations for revenue and profits in the last quarter, it's safe to say that some of their effort is working.

Didn't the layoffs happen in January (the end of their fiscal quarter) and wouldn't they have taken the costs of those layoffs and subsequent severance in that quarter? So they recorded record revenue and profits _despite_ laying off people, not because they laid them off.

And whilst $10m sounds like a lot (and it is!) that's only about ~50 (Bay Area) employees.

Probably fewer than that. Cost of an employee to the company is on average 2x their salary. Plus such mass layoffs don't just target entry level employees but an entire vertical slice including senior ICs, managers and executives. A lot of them at companies like Salesforce, Google, Meta get $1M+/yr in comp.

> marketing budget

Do people who would be in a place to make the decision about their companies choice of CRMP really need to be marketed to in order to know about Salesforce? Seems like a wasted budget IMO.

> The layoffs they are referring to happened in early January. They are not laying off another 8000 employees.

That's not true. They announced 8,000 layoffs in January but they haven't executed all of that yet. As per the quoted WSJ article:

> In January, the company said 8,000 workers had to go. “It’s an unfortunate part that you have to say goodbye to folks who, in many cases, are your friends and you have relationships with,” Mr. Benioff said in an interview. “But, ultimately, the success of the business has to be paramount.”

> After an executive retreat in February, he proposed in a draft of a year-ahead strategy plan that the company rank employees based on metrics, including how much money salespeople bring in. Those in the bottom 5% would be routinely dismissed, according to a draft of the policy posted on the company’s Slack channel and described to The Wall Street Journal.

The two aren't connected. They announced 10% layoffs in January and executed it. Then they announced that they would be rolling out stack ranking and PIP quotas for managers, but both of those decisions were later reversed (https://www.businessinsider.com/salesforce-plans-ranking-emp...).

It's actually unclear as to whether or not they have done all of the layoffs. From your article:

> The company has been reducing its workforce since November, when it cut hundreds of salespeople. In January, the company announced restructuring plans to lay off 10% of staff — roughly 7,000 people — and shed some of its office real estate.

> Since then, thousands of workers from that planned 10% cut have been notified of their terminations. Insider has also reported that remaining employees are feeling increased performance pressure, and some are being pressured to quit with severance offers that are not as big as those being laid off.

> Salesforce has not confirmed whether it has notified all 10% of workers included in the official restructuring plan yet. Insider previously reported that at least one person familiar with the matter said the company was evaluating last month whether it needs to cut an additional 10%.

> The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant has nothing to do with Matthew McConaughey.

Like everyone else in Tech, they over-hired because they were objectively in a different state of the world in 2021, which was possibly everyone's best year in 1-2 decades. Then 2022 rolled in, shit hit the fan on inflation, Ukraine war and a seemingly overnight massive hike in rates after being in negative yield territory for a while... guess what? Companies went back to the drawing board, stared at lower revenue expectations, higher costs, worse margins given operating leverage and decided they could do without X% employees to favor profitability over growth, since there's nowhere near the same growth to be had in 2022-23 as there was in 2020-21

Conceptually, I dislike layoffs as much as the next person... but keeping the same cost structure against deteriorating topline growth is just Bad Business, and that's how CEOs get fired and companies go under. Ask the owner of the pizza joint nearest to you and they're likely to agree.

All in all, unemployment is still at record lows so I'm incline to believe that laid-off workers are finding employment elsewhere, which is the good side of Capitalism.

It could have been worse, John... a lot worse