- Salesforce, Inc CRM weighed new ways to cut costs as activist investors pressured the company.
- Salesforce implemented much stricter performance measurements for engineering. It pressurized salespeople to quit or succumb to the harsh performance policies, TechCrunch reports.
- Salesforce’s policies could include performance reviews based on the quantity of code produced for engineers, a flawed way to measure engineering productivity, which encourages quantity over quality.
- Salesforce asked salespeople to opt between signing a strict one-month performance improvement plan or taking an exit package.
- Salesforce also mandated a return to the office, an attitude shift after promoting the idea of the “all digital, work-from-anywhere workplace” since the pandemic hit in 2020.
- CEO and chair Marc Benioff’s 2022 telegraph suggested that folks working from home did not prove productive.
- Activist investors, including Elliott Management, Starboard Value, ValueAct, and Inclusive Capital probably pressurizing Benioff to increase productivity and cut costs.
- Ray Wang, founder and principal analyst at Constellation Research, blamed Boston Consulting Group, which he says was brought in by the activists to deal with the cuts and implement new performance review policies.
- Wang isn’t a fan of how the activists have handled this, calling them “vulture firms.”
- While he does agree with their assertion that Salesforce overpaid for bad acquisitions, he believes these firms lack an understanding of how to run a company like Salesforce. They are ultimately doing more harm than good.
- In January, Salesforce shared plans to lay off 10% of its workforce and cut office space in some markets after the pandemic’s rapid hiring caused an economic downturn.
- Co-CEO Bret Taylor departed in January. Stewart Butterfield, the CEO of Slack Technologies, also recently left the company.
- Salesforce faced flak from analysts for making 72 acquisitions since 2006.
- Price Action: CRM shares traded lower by 0.22% at $169.60 premarket on the last check Wednesday.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
