Salesforce is laying off about 1,000 workers, or 2% of its workforce, a day after reporting blockbuster results that surpassed Wall Street estimates (CRM)
Salesforce is laying off employees across the company, as part of a plan to reallocate resources amid an economic downturn.
The layoffs affect about 2% of its employee base around the world, or about 1,000 people, according to a person familiar with the situation.
The layoffs come on the heels of its second-quarter earnings results, where Salesforce said it beat Wall Street's revenue estimates for the quarter, and raised full year revenue guidance. Got a tip? Contact this reporter via email at firstname.lastname@example.org or Signal at 925-364-4258. Click here for more BI Prime stories.
Salesforce is laying off about employees across the company, as part of a plan to reallocate resources across the company amid the economic downturn. The layoffs affect about 2% of its employee base around the world, or about 1,000 people, according to a source familiar with the situation. "We're reallocating resources to position the company for continued growth. This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities. For affected employees, we are helping them find the next step in their careers, whether within our company or a new opportunity," a Salesforce spokesperson told Business Insider. The layoffs come on the heels of its second-quarter earnings results, where Salesforce said it beat Wall Street's revenue estimates for the quarter, and raised full year revenue guidance. Affected employees have 60 days to find a new position within the company, and will be given a severance package if they can't within that timeframe. Salesforce did not share details about what employees would receive. The layoffs affect employees across the company, the source said. On March 25, CEO Marc Benioff pledged that Salesforce would not do any significant layoffs over the next 90 days, calling on other CEOs to do the same. However, that 90-day commitment expired in June, and Benioff did not announce a new, similar pledge. Salesforce, like most other companies, has not been immune to the effects of the coronavirus pandemic. However, given its earnings results, it has been able to continue growing. With its guidance raised, it is now projecting 20% to 21% growth this year. On the company's earnings call on Tuesday, CFO Mark Hawkins hinted at changes internally, and said the company was "redirecting some of our resources to fuel growth, and areas that are no longer as aligned with the business priority will be now de-emphasized." "While the demand trends were strong in Q2, we remain mindful on how the pandemic may continue to impact our customers and community," he added. At the same time, Salesforce is also managing reopening its offices safely. Last week it announced that all employees could work from home until August 2021, and gave parents the option to take six additional weeks of PTO. Join the conversation about this story » NOW WATCH: Why electric planes haven't taken off yet
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$17.6 billion Zscaler earnings blast past Wall Street expectations – here's why the CEO thinks it can be the Salesforce of cybersecurity by serving the new remote workforce (ZS)
Summary List Placement Comparing itself to disruptive cloud computing giants Netflix and Salesforce, Zscaler announced...Summary List Placement Comparing itself to disruptive cloud computing giants Netflix and Salesforce, Zscaler announced fourth quarter revenue on Wednesday of $125.9 million, a 46% year-over-year increase. The results exceeded Wall Street expectations for the cloud security firm, which had a market cap of $17.6 billion before it announced earnings — though it was trading down about 1.75% in after hours trading at the time of writing. "The market is coming to us," CEO Jay Chaudhry said on a call with investors after the results were announced. Chaudry compared Zscaler to Netflix and said its competitors, the legacy cybersecurity companies, were "stacking DVD players in the cloud." Zscaler serves more than 4,000 companies, including 150 in the Fortune 500. Its cloud security platform serves customers with more than 150 data centers distributed globally to provide faster service to customers. Zscaler has boomed during the remote work caused by the COVID-19 epidemic as companies seeking to protect remote workers bought its cloud-based platform, which allows users to securely connect to applications regardless of device or location – without accessing a company's overall computer network. This allows remote workers to securely work with tools like Microsoft 365, Salesforce, or Box, without bringing cybersecurity vulnerabilities into the company network from their home networks. Despite a fourth-quarter net loss of $49.5 million compared to $5.3 million on a year-over-year basis – which it attributed to a 60% increase in sales staff and increased research and development – the company said it is "going to step on the gas" when it comes to expanding the business. Remo Canessa, the company's chief financial officer, said when it comes to profit versus growth, the firm is going to invest in growth. Chaudhry said he "sees no slowdown after COVID," and that a "work from anywhere" workforce model will "continue increased momentum in our business." Chaudhry and Chief Technical Officer Amit Sinha said in an interview with Business Insider that three new products rolled out Wednesday with the earnings announcement show how Zscaler will grow – and where they believe workforces will evolve. "These new products are expanding our market opportunity," Chaudhry said in the interview. "It's natural for us to expand in these ways that are more and more important in today's market." The new products released Wednesday reflect a greater investment in cloud computing and digital transformation as companies abandon thoughts of returning to normal in a traditional office. They are tools that further serve firms' needs to protect remote workers who need to shift how they work permanently to a cloud-based approach. The tools allow companies to scan their cloud computing assets for unapproved applications remote employees might have added, and to alert the company to cloud-computing configuration errors. They also build security around employees' web browsing, a growing concern in remote work, by streaming a web browser to employees' computers, while the actual pages are loaded on a protected company system. Sinha said the new product release is the most significant of the year for the company, and means "that we are now competing in other markets." Join the conversation about this story » NOW WATCH: A cleaning expert reveals her 3-step method for cleaning your entire home quickly
A memo from Airbnb's CEO announcing huge staff cuts is a case study in how leaders can conduct layoffs in a compassionate way
Airbnb is laying off 1,900 employees, which is about one quarter of its staff. CEO Brian...Airbnb is laying off 1,900 employees, which is about one quarter of its staff. CEO Brian Chesky's memo to the company shows respect and compassion for all employees affected. It's a model for how leaders should conduct layoffs. The memo explains how management decided which positions to cut, what will happen to remaining employees, and the level of job support that departing employees will receive. Click here for more BI Prime stories. On Tuesday, Airbnb CEO Brian Chesky announced to employees that the company is laying off 1,900 employees. That's about 25% of its staff. In the last few months, Business Insider's Troy Wolverton reported, the company has laid off most of its contractors, postponed its summer internships, and slowed its hiring process. Layoffs are not a great experience for anyone, and especially not for the people losing their jobs. But Chesky's memo to employees is a prime example of how to do layoffs right, in a way that's respectful, compassionate, and pragmatic. It's rare to find such an example these days. As Business Insider previously reported, startups including the scooter-maker Bird, the employment marketplace ZipRecruiter, and the women's coworking space The Wing have recently conducted layoffs via massive Zoom calls. Some employees at these companies said they were caught off guard and confused about what was happening. Chesky, perhaps taking a hint from widespread indignation at the idea of layoffs via videoconference, did things differently. His memo to employees followed, almost to a tee, the advice that HR experts have previously shared with Business Insider around conducting layoffs. You can read the full text of the memo here. Here's exactly what Chesky's memo did right. It outlined the decision process for cutting positions In the memo, Chesky was transparent about Airbnb's financial decline. "Airbnb's business has been hit hard," he wrote, "with revenue this year forecasted to be less than half of what we earned in 2019." (The company's 2019 revenue was $4.8 billion, Wolverton reported.) To help alleviate some of the financial burden, Chesky said Airbnb is "reducing the size of our workforce around a more focused business strategy," specifically the business of helping people rent out their homes and find homes to rent. The company is "pausing" its investments in areas like transportation and hotels, Chesky added. That means staff who worked in those areas will likely be let go. Chesky listed as one of his "guiding principles" in conducting the layoffs the desire to "map all reductions to our future business strategy and the capabilities we will need." Elaine Varelas, managing partner at career-management firm Keystone Partners, previously told me that executives doing layoffs should let the business' strategic direction and financial situation guide them. "The positions are what's eliminated," she said, and not the people. It made a justifiable argument for why certain employees will be let go Chesky went one step further, outlining how management reviewed each employee's skill set and considered "how well those skills matched our future business needs." Some employees whose teams were not eliminated will be asked to assume new roles, Chesky wrote. Again, Chesky made it clear that these layoffs are about positions and skills, which are more easily quantifiable and justifiable than how much the CEO likes someone. As Buffer CEO Joel Gascoigne (who conducted layoffs a few years ago) previously told me, it's important to identify how and why positions will be eliminated. Otherwise, executives are vulnerable to subjectivity seeping in — and to employees accusing them of making biased decisions. To that end, Chesky also listed as one of his guiding principles the desire to "be unwavering in our commitment to diversity." It explained why information about staff cuts was kept confidential until now Chesky noted in the memo that management opted to "wait to communicate any decisions until all details are landed" because "transparency of only partial information can make matters worse." This decision to keep news of the impending layoffs private was wise. Varelas told me that a common mistake she sees is not keeping information about layoffs confidential until you're ready to make the announcement. That can lead to rumors — and terror — spreading throughout the staff. It prepared affected employees for one-on-one meetings with their supervisors In contrast to the startup execs that conducted layoffs via a mass Zoom call, Chesky wrote in the memo that the employees who were getting laid off would have one-on-one meetings with a senior leader in their department. Yair Riemer, president of career transition services at CareerArc, previously told me that a one-and-done videoconference isn't the right way to announce layoffs, as efficient as it may seem. Similarly, Varelas said leaders should have one-on-one meetings with everyone who's let go, giving those employees time to process the news and ask questions. It addressed the employees who will be staying on, too Chesky dedicated a few lines of the memo to the Airbnb employees whose positions were not cut: "One of the most important ways we can honor those who are leaving is for them to know that their contributions mattered, and that they will always be part of Airbnb's story." He also wrote that some employees would receive emails about their new roles at the organization, in line with the restructuring, as well as invitations to discuss their new role with a manager. Riemer said it's important to explain to remaining employees how the layoffs are going to affect the organization. The result? "You end up losing that talent anyway," Riemer said. "They're going to start thinking about moving to competitors. They're going to start getting poached. They're going to start losing faith and confidence in your leadership." It treated departing employees with respect and compassion The most important piece of Chesky's memo is that it acknowledged what a disruptive life event layoffs can be. Employees may not know where their next paycheck is coming from, or whether they can afford their next visit to a doctor. In the current economic environment, they may not be certain they can find another job. Varelas previously told me that respect for employees is key. No one should be "treated suddenly like they're a criminal," she said, or even like someone who hasn't worked hard to help the company grow. Chesky outlined what will happen to employees' benefits after they leave. Specifically, employees in the US will receive at least 14 weeks of severance pay, with additional severance pay available depending on employees' tenure at the company. Employees in the US will also receive 12 months of health insurance coverage beyond their departure date. (In all other countries, health insurance extends until the end of 2020.) Most notably, Chesky wrote that Airbnb has dropped the one-year cliff on equity for everyone the company has hired in the past year. That means they don't have to wait one year, as they typically would, for their stock options to vest. All employees have the chance to become shareholders in the company on May 25, Chesky wrote. It outlined the support employees would receive around career development Departing employees will receive relatively substantial support as they look for a new job, according to Chesky's memo. That support includes an alumni placement team, made up of some Airbnb recruiters who help find departing employees their next role at another company. Those employees also have access to a company that specializes in career transition and job placement services. And they're allowed to keep their company laptop, which Chesky said is an important tool in finding a new job. These provisions for employees are important not solely because they're the right thing to do, ethically speaking. The business case for taking care of employees after layoffs is that they're more inclined to stay loyal to the company. "This is the moment where brands are built or brands are dented," Riemer said. If the company mishandles layoffs, Riemer added, "it absolutely will impact recruitment and talent because the world is small." When former employees, say, write reviews on Glassdoor, they won't say terrible things that will dissuade prospective hires from applying if they were shown compassion. And should Airbnb ever want to hire these folks back, they'll remember how respectfully they were treated at this time. It will make a big difference.SEE ALSO: The startup founder's guide to letting people go efficiently and compassionately, if you have no other choice in a time of crisis Join the conversation about this story » NOW WATCH: A cleaning expert reveals her 3-step method for cleaning your entire home quickly
$5 billion software startup Toast just slashed its workforce by 50% despite a recent $400 million funding round, as coronavirus has wiped out its main source of customers
Toast, a $5 billion Boston-based startup that makes software for restaurants, cut 50% of its workforce...Toast, a $5 billion Boston-based startup that makes software for restaurants, cut 50% of its workforce through layoffs and furloughs on Tuesday, a blog post from CEO Chris Comparato announced. "We froze hiring, pulled back offers, and halted merit increases. As a leadership team, we will reduce our pay across the board," the post said. "But with limited visibility into how quickly the industry may recover, and facing slower than anticipated growth, we now find ourselves in the unenviable position of reducing our headcount." The startup had just come off a year of 109% revenue growth, and raised $400 million in a Series F funding round in February — but its balance sheets still weren't padded enough to withstand the blow dealt by the coronavirus outbreak. The layoffs illustrate the ripple effects of the coronavirus outbreak, as restaurant sales plunged by 80% in most cities last month, in turn forcing the restaurant software startup to scramble. Visit Business Insider's homepage for more stories. Toast, a $5 billion Boston-based startup that makes software for restaurants, just cut nearly 1,000 employees from its work force through a combination of layoffs and furloughs on Tuesday. "This morning at Toast we shared the agonizing decision to reduce the size of our company by roughly 50 percent through layoffs and furloughs as a result of the COVID-19 health crisis," a blog post from CEO Chris Comparato announced. The company had well over 2,000 employees earlier, per Pitchbook. Although Toast's main source of customers was a restaurant industry hit hard by the coronavirus outbreak, the news still caught some investors off guard. Toast had just raised $400 million in a Series F funding round in February from a series of investors including Bessemer Venture Partners and TPG, so investors assumed its balance sheets were padded enough. Investors like Mitchell Green of Lead Edge Capital had even cited Toast's February funding round as a stroke of luck for the company. "Nobody knows how deep this will be, nobody knows how long this will be...If Toast had not raised that round in February, it'd be in big trouble," Green told Business Insider last week. (An email from Green to Business Insider on Tuesday said that the outbreak had gotten to the point that most companies would soon be forced to lay off workers). Some employees laid off from the company on Tuesday had only been there for a matter of months, according to their posts on LinkedIn — the unfortunate result of a hiring spree taken after Toast grew revenue by 109% in 2019, in anticipation of even more growth in 2020. But as the coronavirus outbreak hit the country and caused restaurant sales to plunge by over 70% in most cities last month, it forced the restaurant software startup to scramble. Over the past month, Toast began by rolling out a series of measures to help support its target customers hit by the coronavirus outbreak — blog posts with financial advice and resources for affected restaurant workers, a month's credit of software fees for Toast customers and an initiative to support all local restaurants by ordering takeout or buying gift cards. Toast also begun pulling back on its own costs, by freezing hiring, pulling back on new offers, and halting merit-based raises, Comparato's blog post said. But ultimately, continued uncertainty over how long the coronavirus outbreak would last and how long restaurants would be shut, forced it to cut jobs. "But with limited visibility into how quickly the industry may recover, and facing slower than anticipated growth, we now find ourselves in the unenviable position of reducing our headcount," Comparato said. The company said it was offering a severance package, benefits coverage and mental health support, and an extended window for employees to buy vested stock options. It also said it was developing programs to help laid-off employees search for new roles, but did not share further details on what that would look like. SEE ALSO: A team of coding experts built an AI-powered platform during a marathon 60-hour session to help this nonprofit supply medical equipment to fight coronavirus Join the conversation about this story » NOW WATCH: Jeff Bezos reportedly just spent $165 million on a Beverly Hills estate — here are all the ways the world's richest man makes and spends his money