A leaked document claims that Salesforce may cut more jobs as it chases higher margins.
Seen by Business Insider (Opens in a new tab)the document, known as ‘Vision, Values, Methods, Obstacles, and Measurements’ (V2MOM) comes out every year and is usually shared internally to give the CRM giant’s workforce an indication of the company’s direction in the coming months.
This year, it seems that its direction is to increase profit margins, which is likely to result in many layoffs after the redundancies of 10% of the company’s workforce.
Salesforce redundancies
It’s estimated that nearly half of the company’s account executives drive more than 95% of all sales, and in an effort to cut unnecessary spending as it moves toward higher margins, Salesforce may be looking to lay off some of the most unproductive workers.
The company’s fiscal year 2023 target for operating margin is 20%, revised to a tune of 25% in fiscal year 2026. According to Business Insider, activist investor Starboard Value appears to be driving the 31.7%-plus margin, and that’s over the next two years.
All this in an effort to catch up with better performing companies like Oracle (43.3% margin) and Microsoft (46.6% margin).
An extract from the V2MOM draft reads: “Our margin growth is more important than revenue growth…”
That same document also reportedly asked managers to cut “low performers” by 5% a year as the company moved toward a more aggressive, performance-driven setup. It is believed that this number has been removed, asking managers to give employees a rating, reward top performers and cut poor performers, to ensure the “prosperous” future of the company.
It is said that Benioff told the employees of the company’s Slack channel that although it was removed from V2MOM, but it is clear that the company has aggressive targets for a financial reform.