Cloud giant Salesforce has told some employees that their jobs may be at risk, despite record sales and better-than-expected quarterly earnings reported earlier this week.
According to the Wall Street Journal, the cuts will take place in more than a dozen locations worldwide and will affect around 1,000 of Salesforce's 54,000 employees - close to 2 per cent of its total workforce.
The roles that the company plans to eliminate are mostly from sales and customer support. In the US, the move will affect some workers who sell the firm's software aimed at health and life-science firms, financial services companies and other cloud sales teams.
Employees who do lose their jobs will be given 60 days to find alternative positions within the company, so not all 1,000 people will be out of work. The company will also offer compensation and six months of pay benefits to workers who are unable to find new roles within the firm.
"We're reallocating resources to position the company for continued growth," Salesforce said in a statement to the WSJ.
"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."
In March, Salesforce CEO Marc Benioff promised that the company would avoid any major layoffs for 90 days during the pandemic period - a deadline that expired in June.
Commenting on the job cuts, Benioff told Bloomberg that it was very difficult for Salesforce to take the decision.
"There is no lifetime employment at Salesforce," he said. "Everything is performance-based. We are going to make job changes and shift and evolve as our markets shift and as our customers shift."
Benioff said the firm will "rebalance" between 5 and 10 per cent of its workforce each year to focus on strategic areas.
The decision to eliminate jobs comes just a day after Salesforce reported quarterly profits of $2.6 billion, on revenues of $5.2 billion.
Overall revenue was up 29 per cent year-on-year in the second quarter, which ended on 31st July 2020.
Revenue from Service Cloud products for customer support totalled $1.3 billion, up about 20 per cent. The Sales Cloud unit delivered $1.3 billion (up 13 per cent YoY). The Platform and Other category delivered $1.5 billion, up 66 per cent annually.
The company expects total revenues of around $21 billion in its current fiscal year, which will end on 31st Jan 2021.
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