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CNBC reported Wednesday that Salesforce (NYSE:CRM) confirmed it has let go of some employees this week as the software company saw demand ease in some countries and industries.
A report by Protocol earlier on Wednesday stated Salesforce cuts could impact up to 2,500 employees. However, CNBC stated that a person familiar with the matter told them Salesforce let go of fewer than 1,000 people Monday.
A Salesforce spokesperson said in a statement to CNBC that their sales performance process “drives accountability,” and unfortunately, “that can lead to some leaving the business.”
At the end of January, Salesforce employed 73,541 people, while in a filing in August, the company said headcount rose 36% in the past 12 months “to meet the higher demand for services from our customers.”
Reacting to the reports, Jefferies analysts said: “These cuts could indicate macro headwinds might be stiffer than anticipated and could result in ~$540M in cost savings assuming $270K cost per employee and 2K laid off. We are raising our F26 margins to 26% vs. 25% prior.”
Earlier in the day, in a note focused on Salesforce’s current key debates, Morgan Stanley analysts told investors: “With a tighter investor focus on EPS growth, the combination of durable revenue growth against a large market opportunity and the increasing prioritization of margin expansion sets the stage for a >20% EPS CAGR through FY26, which should prove the multiple low at 22X CY23 EPS.”
