Salesforce isn’t planning another ‘major’ round of layoffs and is hiring for critical roles, it says

• CEO Marc Benioff says he’s got no plans for another big round of cuts and hopes layoffs are done.
• Salesforce has laid off at least 10% of its workforce so far in 2023.
• Now, the company is strategically hiring again, it says.

Speaking to Wall Street analysts on Salesforce’s second-quarter earnings call on Wednesday, CEO Marc Benioff took a strange turn when he began praising “boomerang” employees for the company’s stellar results.

Salesforce reported an overall beat for the second quarter of fiscal 2024, including a significantly improved profit margin, and issued upbeat full-year guidance.

The company’s cost-cutting spree this year contributed significantly to the improved profit margin. Benioff announced a major restructuring in January, including the layoff of 10% of the workforce, and, more recently, a price increase, which irritated some customers.

Benioff blamed the downsizing on overzealous hiring during the pandemic boom years of 2020-2021 at the time, and claimed that new remote employees weren’t as productive as a typical Salesforce employee. He also promised to rehire laid-off workers.

So, during this week’s call, Benioff took the opportunity to thank and wax poetic about all of the former Salesforce employees who returned to work for the company during its turnaround effort.

“A lot of these results have to do with not only our incredible employees that we’ve had in place, but also a lot of folks who really felt the desire to come back and help us,” Benioff said. “And I just want to say thank you to everyone.” It’s been an honor to welcome them back.”

Benioff specifically mentioned three boomerang executives who had recently returned to Salesforce after working for other companies for several years, even inviting chief marketing officer Ariel Kelman, who had quietly left the top marketing job at Oracle last year, to speak on the call for an impromptu question-and-answer session.

The CEO appeared to be signaling to Wall Street that he has re-stocked his executive bench following a significant exodus that began late last year. Salesforce has lost key executives since November, including Benioff’s co-CEO Bret Taylor, Slack founder Stewart Butterfield, and Tableau CEO Mark Nelson. Brent Hyder, the company’s chief people officer, left just a month ago. Ebony Beckwith, the company’s philanthropic foundation’s former chief business officer, quietly left Salesforce in June.

However, Benioff boasted about the “long line” of former employees waiting to return to Salesforce, saying he is “welcoming them with open arms,” particularly “across our sales, engineering, and technology organization,” referring to the company’s key business units.

“We’re ramping up hiring for critical roles,” a Salesforce spokesperson told Insider via email when asked to elaborate on Benioff’s remarks.

When the company laid off a number of people in November for “performance-related reasons,” salespeople were among the first to be affected. They make up the vast majority of Salesforce’s workforce. In fiscal 2023, the company spent more than $13 billion — more than twice the amount it spent on R&D, its second-largest operating expense — on sales and marketing costs, the majority of which went to salaries.

The idea of welcoming back boomerangs, let alone thanking them for their assistance in the company’s turnaround, perplexed at least one analyst.

UBS analyst Karl Keirstad asked Salesforce CEO Marc Benioff if the company was done with layoffs after estimating that Salesforce had already cut 11% of its workforce this year and citing Benioff’s praise of boomerang employees. Benioff did not provide a definitive response.

“I don’t know if we can call this a bottom exactly, but we’re not planning any other major restructuring efforts in the company today like what we saw earlier this year,” he said. “We’re hoping it’s over and done with.”

Of course, no CEO can promise that a company will never lay off employees again, but Benioff seemed to imply that another major layoff isn’t currently in the works. This is significant because, earlier this year, Insider reported on internal rumors of an additional 10% cut.

At the same time, if former and current Salesforce employees feel tossed around — told to leave and then told to return — it’s because the message from the top is mixed.