Salesforce Inc – Page 3

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December 21, 2022

Marc Benioff tells Salesforce workers that new employees are ‘facing lower productivity’

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Marlena Sloss | Bloomberg | Getty Images

Salesforce co-CEO Marc Benioff told employees in a Slack message on Friday that the company’s newest hires aren’t being productive enough, and he asked for feedback as to why that’s the case.

“Are we not building tribal knowledge with new employees without an office culture?” he asked in a message viewed by CNBC. He said he was “asking for a friend,” a phrase people often use on the internet to humorously reveal their curiosity about a topic. The message included an emoji showing a smiling face with a halo hovering over it, suggesting innocence.

Benioff’s companywide message addresses what’s become a hot-button issue in Silicon Valley. Since the arrival of Covid sent workers home almost three years ago, companies have been trying to reimagine a future workplace that allows more employee flexibility than in the past. Some businesses have allowed employees to work from anywhere permanently.

Salesforce, the biggest private employer in San Francisco, was among the first tech companies to tell its workforce they didn’t have to come back. Last year, Salesforce acquired communications app Slack, and Benioff said people can work very effectively from their homes. Salesforce said it would let teams decide how much time they would be in office.

But Benioff may be recognizing some of the challenges remote work presents. On Friday he highlighted an issue that he said was affecting employees who joined Salesforce this year and last. Salesforce’s headcount grew by 32% in the past year, and last month it cut hundreds of jobs.

A Salesforce spokesperson declined to comment on Benioff’s message but sent a statement on the company’s policy.

“We have a hybrid work environment that empowers leaders and teams to work together with purpose,” the spokesperson wrote. “They can decide when and where they come together to collaborate, innovate, and drive customer success.”

Benioff is contending with slowing revenue growth as the economy weakens, and a thinning of the upper ranks within Salesforce. Last month, the company said Bret Taylor would be stepping down from his position as co-CEO in January. He’d just been promoted to share the top job with Benioff a year earlier. And days later, Slack CEO Stewart Butterfield announced his departure.

Here’s the full text of Benioff’s Slack post:

How do we increase the productivity of our employees at salesforce? New employees (hired during the pandemic in 2021 & 2022) are especially facing much lower productivity. Is this a reflection of our office policy? Are we not building tribal knowledge with new employees without an office culture? Are our managers not directly addressing productivity with their teams? Are we not investing enough time into our new employees? Do managers focus enough time and energy on onboarding new employees & achieving productivity? is coming as a new employee to salesforce too overwhelming? Asking for a friend. (Im leaving this open ended to get the broadest level of response.)

The message prompted a variety of comments.

Some reacted with an emoji stating “THIS” alongside an up arrow. Others chose emojis that read “WFH” or “citation needed.” Dozens went with a standard emoji known as thinking face.

Benioff chimed in again in the responses.

“Asking hard questions of employees (and customers and each other) for their answers is one of the most effective ways to get answers as a leader today,” he wrote. “It’s why we bought Slack because there is no better way to ask questions and crowd source answers quickly. Already today we have almost 500 replies to these questions — amazing and incredibly useful!”

He was displeased that his message found its way to the press, ultimately ending up on Twitter.

“I hope you will agree it is also disappointing that our private conversations here were almost immediately given to the public media,” he wrote. “I wonder how do we reinforce that Trust is our highest company value? How do we demonstrate the power of Trust and Transparency without an immediate public disclosure. It gets to the heart of who we are at salesforce.”

His responses were shared with CNBC.

WATCH: Salesforce co-CEO Marc Benioff on Bret Taylor’s departure from the company

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December 16, 2022

S&P 500, Nasdaq post worst day in month after strong data fuels worry about Fed rate hikes

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The S&P 500 and Nasdaq Composite indexes recorded their worst day in almost a month on Monday, after a hotter-than-expected U.S. services-sector reading fueled concerns that the Federal Reserve may need to be even more aggressive in its inflation battle.

How stocks traded

The Dow Jones Industrial Average
DJIA,
-0.26%
finished down 482.78 points, or 1.4%, at 33,947.10.
The S&P 500
SPX,
-1.79%
ended 72.86 points lower, or 1.8%, at 3,998.84.
The Nasdaq Composite
COMP,
-11.01%
closed down 221.56 points, or 1.9%, at 11,239.94.
Those were the largest declines for the S&P 500 and Nasdaq Composite since Nov. 9, according to Dow Jones Market Data.

Stocks finished mixed on Friday, although they clinched gains last week, following a robust November jobs report, which stoked fears that inflation might not be so easily defeated.

What drove markets

Strong wage growth numbers released Friday were followed up on Monday by a robust reading for the U.S. services sector — both of which helped to stoke fears that the Fed’s interest-rate hikes, along with the central bank’s modest balance-sheet unwind, haven’t had much of an impact on the tight labor market.

The ISM barometer of U.S. business conditions in the service sector came in stronger than expected, rising to 56.5% in November, a healthy showing that signals the U.S. economy is still expanding at a steady pace.

“If nothing else, the ISM services report is being interpreted as very strong, and thus the economy is overheating and that means more Fed tightening,” said Will Compernolle, a senior economist at FHN Financial in New York. “Consumer resilience has proven to be more intense than I would have expected. In the two most interest-rate sensitive sectors — housing and autos — tightening has channeled into markets in meaningful ways.”

But there has been so much pent-up demand, that higher interest rates haven’t been cooling overall spending as much as the Fed would like because companies are still having to fill a backlog of orders, he said via phone.

In other economic data, the final November S&P Global U.S. services PMI edged up to 46.2 from 46.1, but remained in contractionary territory.

November jobs data released on Friday showed average hourly wages grew over the past year by more than 5% as of November, beating economists’ expectations and stoking concerns that robust wage growth would continue to fuel inflation, market strategists said.

Worries about a more-aggressive Fed also helped to drive Treasury yields higher, adding to the pressure on stocks. The yield on the 10-year note rose 9.6 basis points to 3.6% on Monday. Treasury yields move inversely to prices, and yields had fallen sharply over the past month, driven by shifting expectations about the pace of Fed rate hikes.

Monday’s ISM services figure “surprised to the upside, suggesting that the economy is still running above its long-run sustainable path and that the Fed is going to have to slow the economy more than expected in 2023,” Bill Adams, the Dallas-based chief economist for Comerica Inc. CMA, said via phone.

In other markets news, signs that China’s government is easing its COVID restrictions helped Hong Kong’s Hang Seng Index
HSI,
+4.51%
finish with a 4.5% gain.

Meanwhile, oil futures ended lower on Monday, a day after Sunday’s decision by OPEC and its allies to keep production quotas unchanged.

Falling equity prices helped drive the CBOE Volatility Index
VIX,
+8.87%,
also known as the VIX, back above 20 on Monday. The volatility gauge had fallen sharply in recent weeks as stocks rallied, potentially signaling complacency that could ultimately hurt stocks, said Jonathan Krinsky, chief market technician at BTIG, in a note to clients.

Companies in focus

Tesla Inc.
TSLA,
-6.37%
shares finished 6.4% lower after reports of a looming production cut at its factory in Shanghai, though the electric-vehicle manufacturer denied the reports.
GameStop Corp.‘s Class A shares
GME,
-7.12%
ended down by 7.1% ahead of the company’s third-quarter results, which are set to be released after the market closes on Wednesday. Analysts are looking for a narrowing loss from the videogame retailer.
Shares of U.S. airlines and aircraft makers traded higher on Monday, bucking the broader trend in stocks. Boeing Co.
BA,
+1.22%
and United Airlines Holdings Inc.
UAL,
+2.60%
were among the best performers in the S&P 500, finishing up by 1.2% and 2.6%, respectively.
Shares of Salesforce, Inc.
CRM,
-7.35%
ended down by 7.4% after the company confirmed its CEO Stewart Butterfield is leaving the company following Bret Taylor, the co-CEO, who departs at the end of January.

––Jamie Chisholm contributed reporting to this article.

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December 5, 2022

Salesforce stock falls over 5% on earnings and sudden departure of co-CEO Bret Taylor

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Salesforce cofounder and co-CEO Marc Benioff speaks during the grand opening of the Salesforce Tower, the tallest building in San Francisco, Calif., Tuesday, May 22, 2018.

Karl Mondon | Bay Area News Group | Getty Images

Salesforce reported earnings and revenue on Wednesday that beat analyst expectations. It also announced that co-CEO Bret Taylor is stepping down. CEO and Salesforce co-founder Marc Benioff will the be sole person in charge of the company.

Salesforce stock fell over 6% in extended trading.

Here’s how the company did versus Refinitiv consensus estimates for the quarter ending in October:

EPS: $1.40, adjusted, versus $1.21 expected by analysts
Revenue: $7.84 billion versus $7.82 billion expected by analysts

Salesforce said it expected between $7.9 billion to $8.03 billion in revenue in the company’s fourth fiscal quarter, lower at the midpoint than analyst expectations of $8.02 billion in sales in the fourth quarter. The company also said it would take a $900 million hit in sales because of foreign currency effects.

Salesforce’s total revenue increased 14% year-over-year. Last quarter, Salesforce trimmed its year-end estimates for both revenue and earnings, citing a weaker economic cycle. It reaffirmed those estimates on Wednesday.

Salesforce said that its operating cash flow came in at $313 million for the quarter, which was a decrease of 23% year-over-year.

Subscription and support revenue, which includes the company’s flagship Sales Cloud software and comprises the majority of the company’s sales, came in at $7.23 billion, which was up 13% year-over-year.

The Platform and Other category that includes Slack reported $1.51 billion in sales, an 18% increase year-over-year.

Salesforce spent $1.7 billion on share repurchases during the quarter, the company said.

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November 30, 2022

Salesforce co-CEO Bret Taylor leaving, stock falls after lower-than-expected forecast

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Salesforce Inc. performed better than expected in the third quarter, but executives issued a fourth-quarter forecast that fell short of expectations on Wednesday and revealed that co-Chief Executive Bret Taylor is leaving the company.

Salesforce
CRM,
+5.65%
shares fell about 7% after hours, after rising about 5.5% in the regular session to close at $159.97, their fifth gain in the past six sessions.

The cloud-software company said in a news release that founder, co-CEO and Chairman Marc Benioff will resume the sole CEO role on Jan. 31. Taylor is the second executive to be elevated to co-CEO with Benioff, only to leave with Benioff still in charge. Keith Block stepped down in February 2020 after just 18 months in the position, and Taylor lasted exactly a year in the co-CEO position after being promoted Nov. 30 of last year.

“I am grateful for six fantastic years at Salesforce,” Taylor, who was also vice chairman, said in a statement. “Marc was my mentor well before I joined Salesforce and the opportunity to partner with him to lead the most important software company in the world is career-defining. After a lot of reflection, I’ve decided to return to my entrepreneurial roots.”

See more: Opinion: Salesforce better get used to Marc Benioff in charge, because he keeps chasing off his chosen successors

On the company’s earnings call, Benioff said “we’re still in a little bit of shock and extremely sad” about Taylor’s exit, but did not answer an analyst’s question about whether he would fill the co-CEO position.

At least one analyst said he didn’t see the departure coming: “Given that Mr. Taylor was assumed to be the ‘heir apparent’ at CRM, this does bring up a lot of questions in terms of the management team and frankly offsets some of the positive narrative around margins heading into [calendar year 2023],” wrote Kirk Materne, analyst for Evercore ISI, in a note Wednesday.

Salesforce reported that third-quarter net income fell to $210 million, or 21 cents a share, compared with $468 million, or 47 cents a share, in the year-ago period. Adjusted for stock-based compensation and other costs, earnings were $1.40 a share. Revenue rose to $7.84 billion from $6.86 billion in the year-ago quarter.

Analysts, who have been expressing concerns about a slowdown in business-software spending, had forecast adjusted earnings of $1.22 a share on revenue of $7.83 billion, according to FactSet.

“We remain positive on the long-term outlook for Salesforce as front-office applications leader,” Michael Turits, analyst for KeyBanc Capital Markets, wrote ahead of the company’s earnings report. “That said, we remain cautious regarding the near-term outlook given ongoing recession concerns, slowing cloud spend, and weaker conversations we had with a few Salesforce channels this quarter.”

Those concerns sprung up in the company’s forecast, as Salesforce executives’ guidance fell $900 million short of expectations. They expect fourth-quarter earnings of 23 cents to 25 cents a share on revenue in the range of $7.932 billion to $8.032 billion, and adjusted earnings of $1.35 to $1.37 a share. Analysts had forecast adjusted earnings of $1.44 a share on revenue of $8.94 billion.

Chief Financial Officer Amy Weaver said on the earnings call that along with the “unpredictable” macroeconomic environment and some slowing in customer spending, the strong dollar had an impact on the company’s showing. “Foreign exchange continued to be a headwind for our results,” she said.

Still, Weaver said the company remains committed to a goal of operating margins of 25% or above; in the third quarter it was at 22.7%, which she said was a record high. Among the things the company is doing, she said, is taking a measured approach to hiring. Earlier this month, the company confirmed hundreds of layoffs, though it did not address them during the call.

See: Tech layoffs approach Great Recession levels

In response to an analyst’s question about employees working from home and the company’s real-estate footprint, Benioff said the San Francisco-based company will have more employees in the office while maintaining the flexibility of remote work. “We’re never going back to how it was, we all know that,” he said. Meanwhile, Weaver said the company is “looking at every aspect of our real estate .”

Shares of Salesforce have declined about 37% this year. The Dow Jones Industrial Average
DJIA,
+2.18%,
whose 30 components include Salesforce, has fallen about 5% year to date, while the S&P 500 index
SPX,
+3.09%
is down almost 15% this year.

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November 30, 2022

Has your workplace caught the ‘turnover contagion’? Here are some warnings signs

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From Meta and Twitter, to Salesforce and Amazon, the tech industry has been plagued by a wave of layoffs in recent months and thousands have lost their jobs.

A new report suggests that may not be the end of their worries, as the dismissal of employees could have a ripple-effect on those who remain in the company.

People analytics firm Visier found that employees are 7.7% more likely to leave after an “involuntary resignation” or termination occurs within their team, while 9.1% are more prone to resign if a team mate’s exit was voluntary.

This phenomenon is called “turnover contagion,” the report said, where workers quit their jobs because of their peers.

When a co-worker’s intentions to quit becomes obvious to others, their behaviors, thoughts and attitudes about their job and the company can become a trigger for others to re-evaluate their own employment situation.

The people analytics firm conducted an experiment across 86 organizations, with more than 1,000 employees around the world.

“Employee resignations are not isolated events, but happen in a social setting,” it added. Turnover in a team can also create disruption and frustration for remaining team members.

“Humans have a tendency to imitate other people,” Andrea Derler, Visier’s principal of research and value told CNBC Make It.

“When a co-worker’s intention to quit becomes obvious to others, their behaviors, thoughts and attitudes about their job and the company can become a trigger for others to reevaluate their own employment situation.”

This is especially so in a hot job market, where employees receive more “pings from recruiters” than before, Derler added.

“[This] can provide the ideal breeding ground for turnover contagion as the interviewing process and learning more about potential other employers is made easier for employees.”

Smaller teams at higher risk

According to Visier, smaller teams are most at risk of turnover contagion. For example, employees who work on teams of 3 to 5 are 12.1% more likely to resign after a team member quits, compared to 14.5% for teams of 6 to 10, said the study.

That is due to “strong interdependencies” and personal relationships between co-workers in smaller teams, said Derler.

“Smaller teams may interact more frequently and get a better sense of each others’ shared experiences of the working conditions, the organization as a whole or even management — and of course, each other’s turnover intentions.”

Turnover contagion can last as long as 135 days, the report added, from the moment an employee voluntarily resigns.

For layoffs however, the contagion window is shortened to 105 days, it added.

Want to quit too? Think again

Derler stressed that it’s “easy to get carried away” when team members resign and she recommends doing a proper evaluation of one’s own work situation before jumping the gun.

Some questions to help evaluate one’s own circumstances would be:

Do I feel engaged at work?
Can I support my current employer’s mission?
Can I balance my work with my life outside of work?
What is my perceived burnout status?
Do I feel fairly compensated and can I see a future for me at this company?
Is the driver for my thoughts and feelings about quitting influenced more by my peer who is leaving, or based on my own motivations?

While there are a multitude of personal, professional and economic reasons that can influence a person to quit, companies underestimate the impact that “one person’s resignation can have on their peer’s decision to leave or stay,” the report added.

For employers who are worried about losing more people to resignations, there are “pre-quitting behaviors” that they can look out for, according to Visier.

That includes decreased productivity, a lesser commitment to long-term timelines, or leaving early from work more frequently than usual.

“While line managers should always work on talent retention activities … it may be particularly important during the first five months after losing a team member to focus on career conversations, ‘stay-interviews,’ or the exploration of internal mobility opportunities to further engage remaining team members,” Visier said in its report.