...
By Aman Kidwai
Workplaces Editor
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
The San Francisco-based software company Salesforce is laying off around 1,000 employees, according to Bloomberg. This comes on the heels of a December announcement from founder and CEO Marc Benioff that the company plans to hire 2,000 salespeople for its new AI products, and in the wake of significant layoffs, Entrepreneur notes, including 7,000 cuts in 2023 representing around 10 percent of the company's workforce and another 1,000 laid off across the next year.
"Tech companies are shifting resources away from older core products toward new AI-driven systems and agents. Salesforce…is undoubtedly trying to redirect engineering and sales resource toward new agent tools and platforms," Josh Bersin, founder and CEO of the Josh Bersin Company, an HR research and consulting firm, told Newsweek.
The laid-off Salesforce employees will be able to apply for openings internally, Bloomberg said, adding that the company's stock price rose 1.6 percent. Amazon, Meta, Microsoft, Starbucks and Stripe are among the major employers to reduce their workforces this year.
Read More on News
"The idea of laying off 1,000 people here and hiring 1,000 people there is a fairly dysfunctional way of doing this," Bersin said. "Many of the 1,000 people being let go have deep skills in Salesforce's business, tools and infrastructure...[and] every new hire consumes management time for onboarding, training and alignment, so this old-fashioned process of 'layoff here, hire there' actually harms productivity in the long run."
...
Bersin noted that the offer to apply internally is a good one in this situation but perhaps it could be done without layoffs, such as instituting a notice period for identified staff to find new jobs and telling hiring managers to prioritize internal hires. Salesforce currently has over 800 open roles on its website while these layoffs are occurring.
"This is a far more mature and high-performance way to transform, and it has a much more positive impact on culture, retention and internal skills," he said, though he noted that "I'm not involved in the details—there could be a process of 'weeding out low performers' at play, which also needs to take place."
It is unique to see major companies simultaneously hiring and conducting layoffs, Steve Cadigan, LinkedIn's first head of HR who now leads a workplace consultancy, told Newsweek. He pointed out that over time, Salesforce has earned a lot of respect as an employer for its leadership development and internal mobility, and he added that perhaps with the company's acquisitions over the years, it may have taken on "people over time that probably won't fit down the road."
The framing of this most recent restructuring also caught Cadigan's attention.
"Salesforce is not saying it's a low-performer purge—rather a restructure and they are letting the impacted apply for open roles," he explained. "We are not used to seeing this, and I attribute that to the increasing need to change skill sets and companies' inability to build these skills as fast as they need them."
He added that he expects to see more major employers laying off while also hiring en masse down the road in order to meet new skills-based needs.
"We are going to continue to see more of this," he said, "reductions while actively recruiting new or different skills."
View 0 Comments
Submit Correction
View Editorial & AI Guidelines