Salesforce has already laid off about 1,000 employees as part of a plan to slash 10% of its workforce, and the MuleSoft unit was the hardest hit so far, insiders said.
CEO Marc Benioff announced the overall plan in an email to staff on Wednesday, saying the cuts will happen "mostly over the coming weeks." A Salesforce spokesperson referred Insider to the email when asked for comment on the details of this report.
While many of the initial cuts came to largely to customer-success roles at MuleSoft, the data integration platform Salesforce acquired for $6.5 billion in 2018, Salesforce's direct sales teams generally were not affected, according to the insiders. Cuts this week also focused on recruiting and product management jobs, the people added. They asked not to be identified discussing sensitive topics.
Salesforce went on a hiring binge during the pandemic, after COVID-19 forced companies to work remotely and use more cloud-based software services. When the pandemic subsided, and economic growth slowed, Salesforce experienced a slowdown, too. It laid off hundreds of sales staff in November, and employees have been expecting more cuts for weeks. Some Salesforce managers were asked in December to rank employees to identify their bottom 10% of performers.
MuleSoft's struggles
MuleSoft has also struggled in recent years as part of Salesforce, Insider previously reported. While MuleSoft's product has been strong, Amazon Web Services, Microsoft, and smaller players like Workato and SnapLogic offer similar services for moving data between business apps, sometimes at lower prices.
In late 2021, when Salesforce reported quarterly earnings, MuleSoft's revenue grew only 16%. That was down from 49% growth only a few quarters before. At the time, that officially made MuleSoft one of the company's slowest-growing units. Executives acknowledged the slowdown, saying MuleSoft was facing "scaling challenges."
Benioff has been stoking employees' fears
Beyond MuleSoft, Benioff stoked many Salesforce employees' fears in a recent all-hands when asked about the possibility of future layoffs and how the company planned to balance cost-saving with employee morale. He noted that the workforce had grown to 80,000 from 50,000 at the beginning of the pandemic, and said it must "evolve."
"This is the part about running a big company, which is you have to be ready to take action when the market changes," he said in a recording of the meeting obtained by Insider.
Some employees who recently spoke to Insider said there's been rising internal pressure to increase sales in the wake of economic headwinds and the interest of activist investor Starboard Value, which disclosed a significant stake in Salesforce in October.
Meanwhile, the company is experiencing an executive exodus, with co-CEO Bret Taylor and others resigning. Insiders said Benioff has been exerting increasing control over the company, alienating his closest lieutenants while dialing up performance pressure on employees.
Are you a Salesforce employee or do you have insight to share? Contact Ashley Stewart via email (astewart@insider.com) or send a secure message from a nonwork device via Signal (+1-425-344-8242). Contact Ellen Thomas via email (ethomas@insider.com) or on Signal: (+1-646-847-9416).
