Salesforce CEO Benioff: Exit interview was a bad idea
Salesforce’s year got off to a rocky start when the company announced a second round of layoffs that affected 10% of its employees, whom the company affectionately refers to as its “ohana,” or family.
The day after Salesforce announced the cuts, CEO Marc Benioff chaired an all-hands meeting to explain the company’s decision. It didn’t go well. Employees criticized Benioff for being evasive during the meeting and for pitching the “ohana” idea in a call expected to be about job losses.
Now Benioff says the two-hour phone call wasn’t a good idea.
“We tried to explain the inexplicable,” Benioff said The New York Times in an interview published on Monday. “It’s difficult to make a call like this with such a large group and be effective and we paid a price.”
This episode left some of the Salesforce employees who were spared upset and perplexed about their role in the company; Workers flooded a Slack channel dedicated to worker grievances with complaints, wealth reported earlier this month.
But Benioff credited the layoffs as part of how Salesforce works and that there would be no growth unless the company was in a comfortable “stable state.”
“I wish I had offered a job for life,” he said Just. “But the reality is, if you have a large company with 80,000 employees, there will be times when you need to make a staffing adjustment. Our severance packages are among the most generous ever.”
Stewart Butterfield, former CEO of Slack, the workplace communications platform acquired by Salesforce for a whopping $28 billion during the pandemic, even acknowledged the relative generosity of the severance package compared to many other companies. It included a “longer-than-usual paid notice period,” allowing for bonuses to be awarded and stock to be transferred to cushion the blow. The severance package for laid-off employees included at least five months’ salary.
turbulent times
Salesforce has had a turbulent few months. The company laid off hundreds of employees in November, ending a hiring run that has tripled its headcount since 2017. Co-CEO Bret Taylor abruptly left the company in December after serving just a year. Activist investors are also urging the company to cut costs and make other changes.
The company is pursuing an aggressive cost-cutting strategy to increase profit margins and keep expenses under control. Earlier in the year, Benioff told some associates that he intended to cut costs between $3 billion and $5 billion, and real estate would be a “big part” of that mission.
Salesforce isn’t alone in its quest to cut costs, particularly through massive layoffs. Many of its competitors, including big tech companies like Microsoft, Google and Meta, have also laid off large swaths of their workforce after overhiring during the COVID-19 pandemic. According to Layoffs.fyi, a layoff tracking platform, so far in 2023, 345 companies have laid off more than 103,000 workers.
Salesforce didn’t return immediately Assets Request for comment sent outside of regular business hours.
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