> The fact that they also decided that 8K out of the 25K+ employees hired during the pandemic were redundant

Kinda odd how you attribute them "beating the street" more to Mathew McConaughey's presence than the work output of 8 thousand employees. Can you elaborate on why this is so clear to you?

Didn't the layoffs happen in January (the end of their fiscal quarter) and wouldn't they have taken the costs of those layoffs and subsequent severance in that quarter? So they recorded record revenue and profits _despite_ laying off people, not because they laid them off.

Do people who would be in a place to make the decision about their companies choice of CRMP really need to be marketed to in order to know about Salesforce? Seems like a wasted budget IMO.

That's not true. They announced 8,000 layoffs in January but they haven't executed all of that yet. As per the quoted WSJ article:

> In January, the company said 8,000 workers had to go. “It’s an unfortunate part that you have to say goodbye to folks who, in many cases, are your friends and you have relationships with,” Mr. Benioff said in an interview. “But, ultimately, the success of the business has to be paramount.”

> After an executive retreat in February, he proposed in a draft of a year-ahead strategy plan that the company rank employees based on metrics, including how much money salespeople bring in. Those in the bottom 5% would be routinely dismissed, according to a draft of the policy posted on the company’s Slack channel and described to The Wall Street Journal.

Like everyone else in Tech, they over-hired because they were objectively in a different state of the world in 2021, which was possibly everyone's best year in 1-2 decades. Then 2022 rolled in, shit hit the fan on inflation, Ukraine war and a seemingly overnight massive hike in rates after being in negative yield territory for a while... guess what? Companies went back to the drawing board, stared at lower revenue expectations, higher costs, worse margins given operating leverage and decided they could do without X% employees to favor profitability over growth, since there's nowhere near the same growth to be had in 2022-23 as there was in 2020-21

Conceptually, I dislike layoffs as much as the next person... but keeping the same cost structure against deteriorating topline growth is just Bad Business, and that's how CEOs get fired and companies go under. Ask the owner of the pizza joint nearest to you and they're likely to agree.

All in all, unemployment is still at record lows so I'm incline to believe that laid-off workers are finding employment elsewhere, which is the good side of Capitalism.

It could have been worse, John... a lot worse

https://investor.salesforce.com/press-releases/press-release...

This is businesses reacting to activist investors and trying to quash workers asking for better compensation. To the extent that the economy lags it’ll be due to layoffs affecting people who circulate their income more effectively than shareholders.

It'll take a while for a consensus narrative to emerge explaining the widespread tech layoffs.

Usual suspects are: post-pandemic hangover (over hiring), C-level & boards are feckless lemmings (copycats, groupthink), another round of revanchist Capital sticking it to Labor, profit taking by institutional investors, and macroeconomic stuff (end of cheap capital, blah blah blah consumer confidence, and so forth).

My personal theory: The MBAs couldn't think of anything else to do. They're admitting their growth has ended.

Cost cutting, including layoffs, happens in the absence of strategery [sic], plans for the future. So there's nothing to invest in. So they "return monies to their investors".

What's Meta's plans? Social networking and digital advertising have entered the top plateau of the S-curve. And it's not yet clear they can monetize their pivot to 3D porn (the Zuck's "megaverse").

What's Amazon's plans? It's now "Day 2". AWS is on autopilot and will continue to print money. If the rest of the conglomerate disappeared tomorrow, the share price would increase. There's nothing left in the B2C space to do.

As a counter point, Apple definitely has plans. IIRC They keep increasing their R&D. (And they didn't over staff.) So no layoffs.

You clearly buy into the idea that because salesforce has, within our current economic system, managed to gather to itself substantial economic resources, then it should be the entity that gets to decide how to deploy those resources.

If Salesforce is wrong (and there's a very, very good chance that they are), they have mis-allocated resources, but will face little if any penalty for it other than some opportunity costs that are of their own making.

> There’s no possible way for an outsider to know what the value of having McConaughey sit around is, what the contractual details are, what the cost, both monetary and otherwise of splitting from him, etc is.

The actual question is whether there is actually any way for an insider to know this either, and what penalties would be face if they make a mistake.

I'm fine with companies making a profit (I think). But I want them taxed in a way that removes their control over the bulk of these resource allocation decisions. Salesforce might (or might not) be very good at what they do, but they, like every other corporation (and essentially all individuals) have no demonstrated competence at resource allocation that benefits all of us. US$10M might not seem like a lot if it is roughly your annual salary, but there are huge numbers of people and communities that would be substantially aided via US$10M.

Though I think there is something to be said about companies spending money imprudently. It's never just that they're giving McConaughey $10M/year. Often times there's a slew of vanity expenses that aren't justifiable. I'm not saying that's necessarily the case with Salesforce, but companies spend a lot of money on things that have dubious ROI.

For example, GE advertised their smart electric grid technology during the Super Bowl and licensed the Wizard of Oz for it. That's a lot of money for an ad with very dubious ROI. Who is buying smart electric grid technology? A very small handful of companies who are going to have a competitive bidding process and are already going to be aware of their options. What was the point of this commercial? To me, the most likely explanation is executive vanity. They want their friends and peers to be impressed by their company and by extension themselves. If they're working on something invisible and behind the scenes, they aren't going to get the same recognition and acclaim.

Companies sponsor sports stadiums and sometimes you can't even really buy their product. Highmark sponsors the Buffalo Bills stadium, but most people get their insurance via their employer and don't have a choice. Xcel Energy sponsors the NHL stadium of the Minnesota Wild and most of their business is as the monopoly electric/natural-gas transmission provider in the area. Are they trying to convince people "you don't want to live off the grid! Life is better with electricity and heating!" And yes, these companies do have some amount of business that is consumer choice, but given how much of their business has zero consumer decision-making, it seems like their ROI on advertising and sponsorships would be terribly low. Consumers do decide on many things - what soda brand to buy, what smartphone to use, what clothes to wear, what car insurance to get, etc. However, we see companies spending lots of money on things that have really dubious justification - beyond the vanity of executives.

I don't know much about Salesforce and what they're spending money on, but I do think there's a reasonable question of whether McConaughey's $10M is part of a larger trend of imprudent, potentially vanity-driven spending.

Just wow! What about ever increasing stocks? ever increasing returns on VC funds? You've gotta be kidding.

Please don't pick the most provocative thing in an article or post to complain about in the thread. Find something interesting to respond to instead.

https://news.ycombinator.com/newsguidelines.html

The article isn't really about Hawaiian culture, nor is the complaint it is making about how Salesforce prioritizes its expenditures.

If that is already sunk money and they paid it to him before the layoffs than the article is off base.

But why is he at $10M not replaceable by some other celebrity who might do the work for 10x or 100x less? He has no special credibility around anything to do with Salesforce, CRM, or anything in tech.

It's more likely Benioff has a man crush on him and like the fact he gets to hang out with a famous movie star and pretend he's friends with him or something and can conveniently ignore that he's kind of buying a famous friend for $10M.

A really well executed ad campaign with a less famous, less expensive star might be far more effective.

The labor theory of value[1] is still a very popular belief. Even though it doesn't work very well if you poke it at all.

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1. https://en.wikipedia.org/wiki/Labor_theory_of_value

Without knowing what any of them did, it’s obvious that none of them, nor in aggregate, brought any near the value to Salesforce as did one aging celebrity.

Anecdotally, I’ve never seen anything associating the actor with Salesforce in any capacity. Even those I know at the company didn’t know he advertised for them. (But capitalism!)

If they've ceased all marketing and just hope MM will take up the slack, it might be a dumb move. If they have too many software or back office or whatever people, the decision to let them go is completely decoupled from what they spend on marketing. It's not an either / or, it's different part of the business entirely.