Salesforce will reduce its workforce by 10% worldwide. For the moment, the French subsidiary does not know if it will be affected and in what proportions. In Paris, some employees say they are shocked by the surprise of this announcement.
In total, around 7,300 employees are expected to be affected worldwide by Salesforce’s workforce reduction plan announced on Wednesday January 4 by its founder and CEO, Marc Benioff. Salesforce also announced that the company would close several offices, without specifying which ones. The leader sent an email to the 73,000 members of Ohana – as he likes to define his company, which is a Hawaiian word for a family and which, in the house culture, defines the work collective as a kind of community or of tribe, with strong links, more than professional… A little undermined by this announcement.
On the side of the very beautiful Parisian headquarters located next to the Champ-de-Mars in Paris, an internal source indicates to The New Factory ignore for the time being if France will be affected by this movement, and what could be the extent of the movement to reduce staff. A union source indicates that a social and economic committee (CSE) is planned for Thursday January 5, but fears that the human resources department of the company in France does not yet have an answer. The French management has not yet responded to our interview requests. The only certainty: the layoffs should be completed within a year, at the end of the 2024 accounting year. According to Infogreffe, Salesforce employs 1,230 people in France and generates a turnover of 370 million euros.
“A real shock” for French employees
But the shock wave spread to the French subsidiary. “In the United States, managers notified by email left within the hour and are no longer reachable today. It’s a real shock“, continues the source.
The email sent by Marc Benioff, and published in particular by the San Francisco Business Journaldetailed that “for those leaving Salesforce, [la] priority is to fully support them, in particular by offering them a generous package. In the United States, affected employees will receive a minimum of nearly five months’ salary, health insurance, professional resources and other benefits to facilitate their transition. Those outside of the United States will receive a similar level of support, and [les] local processes will comply with the employment laws of each country“. In total, the downsizing plan will cost the company between $1.4 billion and $2.1 billion.
A disrupted economic model
According to Marc Benioff, the layoffs are due to a backlash from the dynamism of the activity recorded by Salesforce during the pandemic. The company would have hired too much and should, to face the new economic situation, reduce the airfoil. This is all the more necessary since Salesforce is a pioneer of the Saas model, that is to say by subscription. When all is well, new customers arrive and the cash falls month after month. Periods of economic downturn are more complicated to get through, since initially, the economic slowdown results in bankruptcies, leading to the disappearance of customers, or in reductions in the number of subscriptions per company. In addition, Salesforce has multiplied acquisitions and this announcement comes as interest rates are rising. In early December 2022, the company announced the departure of Bret Taylor as co-CEO and vice-president.