- When Salesforce began layoffs on Wednesday, employees panicked.
- CEO Marc Benioff’s all-hands on Thursday offered little clarity and frustrated many, insiders said.
- Employees say they don’t know who’s next. Some have started organizing their grievances. “We can’t sleep at night.”
On Thursday, around 47,000 Salesforce employees nervously waited for their CEO, Marc Benioff, to arrive at an all-hands virtual meeting scheduled for 10 a.m. Pacific time. He was 18 minutes late.
It came a day after Salesforce began layoffs — affecting at least 1,000 people so far, as part of its publicly announced plan to cut 10% of its workforce, Insider reported. That could be around 7,000 people based on Salesforce’s most recently released headcount of 73,461 employees.
Benioff, who is known for being chronically late, seemed unaware that he wasn’t on time. After co-founder and CTO Parker Harris opened the meeting by apologizing for being late, Benioff asked, confused, “Are we late?” That was the first indication that the meeting wasn’t going as employees hoped had.
Benioff then launched into a meandering two-hour conversation that insiders called “tone deaf.” He joked about Wednesday’s layoffs ruining Harris’ birthday and how he’s “thrilled” about the pandemic because it’s allowed him to work from home. He gave a talk on the importance of gratitude and, with Harris, recalled how a rabbi on a bicycle had helped them with the company’s very first layoffs over 20 years ago.
More importantly, he dodged questions from employees who were flooding the company’s internal all-hands slack channel, asking things like, “What percentage of the 10% layoffs is complete?”, “Has anyone scheduled for layoff, notified?,” and “How is employee productivity measured?” Some of the questions were read aloud to Benioff during the meeting, but the answers weren’t clear, some attendees told Insider.
Employees, even officers, were left with little information about the company’s restructuring plans other than to wait and see if they would be notified via email that they were no longer employed.
“We can’t sleep at night,” an employee told Insider. “When’s the email coming that you’re next?”
Benioff’s lengthy meeting sparked outright anger from some employees, who immediately afterwards went to Slack to demand answers, according to screenshots provided by Insider. “The lack of awareness of what’s really on our minds and the complete avoidance of question-and-answer questions is astounding,” one person wrote.
So many employees were upset about the meeting that one Salesforce executive apologized to her team at a later meeting. The All-Hands also inspired a group of employees to create a management grievance list.
Prepare for more layoffs and confusion
Employees first learned of the layoffs Wednesday through a 3am email from Benioff, which said all “originally affected” employees would be notified within an hour.
The grassroots had been bracing for layoffs for weeks based on news from insiders and others, as well as internal rumors about things like managers being asked to rank their bottom 10% of top performers.
However, many employees and managers still felt caught off guard when the cuts began, People told Insider, because only a few senior executives were notified in advance. Senior vice presidents, who were not themselves affected, have been invited to a mandatory meeting, Salesforce said.
A manager had to call each of his own employees to find out if they were fired, that person posted on the Slack channel during Thursday’s All-Hands.
Another person who was fired learned about the layoffs through social media while taking time off, they said.
Those who were laid off received emails with a severance package that would pay them as regular employees until the end of March, and then additional severance pay based on time at the company, insiders say. The first cuts mostly affected the business units of companies acquired by Salesforce, such as MuleSoft, Tableau and Slack, Insider reported.
The company told some managers that all affected U.S. employees had been notified Wednesday, according to a person familiar with the matter, and that employees in Asia-Pacific, the Middle East and Africa would continue to be notified in the coming weeks .
But Salesforce executives have repeatedly warned the workforce that more rounds of layoffs are on the horizon in the coming weeks. And Salesforce confirmed to Insider that more US employees will be cut.
While All-Hands executives, which included Chief People Officer Brent Hyder, didn’t offer any clear insight into the All-Hands, they did say openly that more staff would be cut in the coming weeks. Benioff also repeatedly spoke of the fact that some workers, especially newer ones, were not productive enough.
“We don’t have the same level of performance and productivity as we had in 2020 before the pandemic. We don’t have that,” he said. But he didn’t offer a firm end date for the restructuring, and Hyder indicated the company isn’t yet aware of all the specific employees that will be laid off, Insider reported.
Sermons, dismissals and deaths
Rather than address those key concerns, Benioff spent much of Thursday’s meeting explaining to his employees the importance of practicing gratitude, compassion, integrity and empathy while they wait to see who gets fired.
He even described the company’s current situation as a “spiritual moment” and compared layoffs to death.
“Every year at the start we have a moment where we always say goodbye to everyone who has died during the year. And loss is really difficult and loss of people, and especially loss of our trusted colleagues and our managers or employees, is in a very similar way to me in a lot of ways,” Benioff said.
The staff didn’t seem to appreciate what they took to be both a sermon and a finger-wagging.
“I just feel encouraged. I feel like I did something wrong,” said one employee who was present. “The call was silent,” said another.
One was posted on the Slack channel, where employees are commenting on the meeting and demanding replies. “Is Marc currently spoiling over 47,600 employees by talking in circles and avoiding the current topic?”
Many others wrote variations on “ANSWER OUR QUESTIONS” and “what are we even talking about?”.
A group of employees isn’t content to wait for replies or emails.
As a result of their frustration with the All-Hands, they’re compiling a list of grievances to share with Salesforce leadership, including how productivity is measured and used in return. And they’re considering taking more formal steps to organize their employees’ voice. “Executive response was a driving force that brought us together,” said one person in the group.
When the all-hands round ended, one in attendance described morale at the company as “in the gutter.” Another described the feelings they shared with co-workers as “angry, confused and scared”.
Stop calling workers a family
Some employees pointed out that these layoffs coincide not only with pressure to increase sales in a slowing economy, but also with interest from activist investor Starboard Value, which announced a significant stake in Salesforce in October.
Some Salesforce insiders have speculated that the sales teams, which suffered cuts in November but were largely unaffected by this round of layoffs, could see cuts in the first fiscal quarter of 2023.
“People can’t focus when they know layoffs are coming. If they’re doing layoffs, I don’t know why they aren’t doing it all at once,” said one employee. “It just hurts productivity that way.”
Benioff’s handling of the layoffs drew frequent criticism of his “ohana” mantra. Benioff often speaks at Salesforce about spirituality and the concept of ohana. According to a 2017 Salesforce blog, “ohana” in Hawaiian culture represents family ties that encourage people to be responsible for one another.
“Given how little this call has addressed about the layoffs, the questions asked in this channel, and the ‘family’ that was laid off, should we consider retiring the phrase ‘ohana’?” asked a staffer in a Slack message. “Can leaders commit to never again referring to Salesforce employees as ‘family’? You don’t fire your family to make up for your own mistakes,” wrote another.
“Ohana is far away,” a staffer told Insider.
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