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Salesforce has recently announced plans to reduce its workforce. This follows the 90-ish layoffs the company announced earlier this year. Most layoffs will be in other parts of the country, though, as only about 10% of its global workforce works in San Francisco. The company also faces a talent war. Activist hedge funds are demanding higher margins and are calling for the company to increase its hiring practices.
Activist hedge fund calls for Salesforce to increase its margins
An activist hedge fund called Starboard Value is calling for Salesforce to increase its profit margins. The firm has purchased a large stake in the company and sees an opportunity to improve the company's profitability. The fund's founder, Jeff Smith, is optimistic about the future of the company and plans to continue investing in the company for the long term.
However, Salesforce's stock is under pressure to cut costs, as it recently announced layoffs and a hiring freeze. This is despite the fact that the tech industry is facing macroeconomic headwinds. As a result, Starboard Value believes that the company should focus on increasing its margins instead of cutting costs.
Salesforce shares are on the rise in premarket trading, with the firm's valuation already at $142 billion. Activist hedge fund Starboard Value's Jeff Smith said the company had undervalued its stock due to subpar growth. Though Smith did not disclose the size of his position, he said he is "committed to helping the company increase its margins."
However, Salesforce's stock is under pressure to cut costs, as it recently announced layoffs and a hiring freeze. This is despite the fact that the tech industry is facing macroeconomic headwinds. As a result, Starboard Value believes that the company should focus on increasing its margins instead of cutting costs.
Salesforce shares are on the rise in premarket trading, with the firm's valuation already at $142 billion. Activist hedge fund Starboard Value's Jeff Smith said the company had undervalued its stock due to subpar growth. Though Smith did not disclose the size of his position, he said he is "committed to helping the company increase its margins."
Tech industry is slowing down
With the tech industry facing a slowdown, companies have been evaluating their hiring plans for the rest of the year. Many have halted new hiring altogether, while others have reduced staff size. This includes Salesforce. Other companies have slowed down new hiring in certain departments and have cut travel expenses.
Tech companies have seen a significant slowdown this year, with several hundred job cuts this year alone. According to Crunchbase News, nearly half of tech companies are assessing their workforces and imposing hiring freezes. The tech industry is also experiencing a slowdown in the overall economy. Companies like Netflix, Twitter, and Glossier are among those making mass layoffs. This has led to a roller-coaster stock market.
The company has terminated contracts with contractors that specialize in temporary recruiting. It has also halted hiring until January 2023. These recent changes are the result of pressure from investors seeking higher returns on Salesforce, which has invested billions in acquisitions in recent years. In addition, activist investors like Starboard are placing pressure on Salesforce to raise its payout.
Tech companies have seen a significant slowdown this year, with several hundred job cuts this year alone. According to Crunchbase News, nearly half of tech companies are assessing their workforces and imposing hiring freezes. The tech industry is also experiencing a slowdown in the overall economy. Companies like Netflix, Twitter, and Glossier are among those making mass layoffs. This has led to a roller-coaster stock market.
The company has terminated contracts with contractors that specialize in temporary recruiting. It has also halted hiring until January 2023. These recent changes are the result of pressure from investors seeking higher returns on Salesforce, which has invested billions in acquisitions in recent years. In addition, activist investors like Starboard are placing pressure on Salesforce to raise its payout.
Salesforce is reevaluating its hiring strategies
Salesforce has not officially announced plans to lay off any employees in 2022, but recent layoffs have shown that tech companies are facing tough economic times and have to cut their workforces. Companies that spend heavily on hiring are not immune from the layoffs, and even aggressive recruiting isn't a sure thing.
The company has announced a temporary freeze on hiring for certain positions and has reduced corporate travel expenses. The company has not yet announced layoffs, but it is still taking a long, hard look at its hiring strategy. The company is likely to continue to reduce its headcount, limiting the number of open positions while keeping its core business running.
The company has stopped hiring new employees last year, leaving it with a workforce of 78,000 at the end of April. Similarly, e-commerce platform Shopify has cut back on hiring, and offers employees 16 weeks of severance and a free storefront.
The company has announced a temporary freeze on hiring for certain positions and has reduced corporate travel expenses. The company has not yet announced layoffs, but it is still taking a long, hard look at its hiring strategy. The company is likely to continue to reduce its headcount, limiting the number of open positions while keeping its core business running.
The company has stopped hiring new employees last year, leaving it with a workforce of 78,000 at the end of April. Similarly, e-commerce platform Shopify has cut back on hiring, and offers employees 16 weeks of severance and a free storefront.
It is facing a war for talent
With Salesforce's rapid growth and rapid expansion into other industries, the company is competing with its partners and customers for the best employees. This competition is resulting in a skills shortage and the increasing poaching of workers from other companies. The company also faces a talent shortage because of the increasing complexity of its roles as it nets larger deals. As a result, many players in the Salesforce ecosystem believe this trend will weaken the ecosystem and threaten the growth of the company.
Despite a high level of talent shortage, companies in the Salesforce ecosystem can take actions to offset the shortfall. For one, increasing training opportunities is one solution. Another solution is embracing low-code capabilities. Lastly, building a talent pipeline is another way to fill talent gaps and land projects without restrictions.
One way to attract entry-level talent is to offer incentives for partners and customers to hire these individuals. For example, Salesforce could offer discounts to partners and customers who help recruit new employees.
Despite a high level of talent shortage, companies in the Salesforce ecosystem can take actions to offset the shortfall. For one, increasing training opportunities is one solution. Another solution is embracing low-code capabilities. Lastly, building a talent pipeline is another way to fill talent gaps and land projects without restrictions.
One way to attract entry-level talent is to offer incentives for partners and customers to hire these individuals. For example, Salesforce could offer discounts to partners and customers who help recruit new employees.
