Salesforce co-CEO Marc Benioff took a needed first step this week toward stabilizing the company’s struggling stock, disclosing plans to rightsize its overgrown workforce.
His next big task: getting more of Salesforce’s newest employees in sync with corporate leadership.
Fresh off Wednesday’s announcement of a 10% reduction-in-force, Fortune and Bloomberg published reports Thursday revealing a stark disconnect between Salesforce management and staff working in its recently acquired Slack and Tableau divisions. Salesforce closed deals for the two companies in 2021 and 2019, respectively, for a combined $43.4 billion.
Questions about a potential rift between Salesforce leadership and staffers at the recently acquired outfits have been burbling for months, particularly in light of Slack CEO Stewart Butterfield announcing his resignation plans in December. Salesforce’s poor financial results in 2022—its stock price sank by 49% and net income through the first nine months fell year over year from $1.5 billion to $300 million—also continue to weigh on the company.
But Thursday’s reports brought some of those tensions more into the open.
As Fortune’s Kylie Robison reported, Slack employees used an hourlong Q&A with the division’s senior leadership to air frustrations about a culture clash with the tech giant’s management. One staff member asked Butterfield how Slack’s remaining leaders can “help us stay in touch with our Slack values inside Salesforce,” accusing the parent company of disregarding those values. Others questioned whether Salesforce still sees Slack as a strategic priority and asked for clarity about Slack’s role in the company.
In a refreshing moment of candor—likely enabled by the fact that he’s got one foot out the door—Butterfield agreed with those grievances and took ownership of the rocky marriage.
“The problem has been, there’s no incorporation of the Slack culture into the Salesforce culture,” Butterfield said, according to an audio recording of the meeting obtained by Robison. “And unless there is some element of that, then it’s not integration in any sense. It’s just the elimination.”
Anxiety is also high within Salesforce’s Tableau data-visualization unit, which has struggled to live up to its $15.7 billion price.
Bloomberg reported that the division was “hit harder than other units” by Salesforce’s job cuts, though the news outlet didn’t detail exact layoff totals. In addition, many of Tableau’s leaders at the time of the Salesforce acquisition, including then-CEO Adam Selipsky and product development chief Mark Nelson, have resigned or been forced out of the company in the past three-plus years.
“Tableau is increasingly being treated as a visualization tool for data contained in Salesforce’s other services rather than a stand-alone program—cofounder and CEO Marc Benioff highlighted the new integrations in a December keynote speech,” Bloomberg reported. “The division has trailed the rest of the company in sales growth since the acquisition.”
It’s too soon to say Salesforce should feel buyer’s remorse about its two largest corporate acquisitions.
Both units remain solid long-term fits within a company aspiring to join the ranks of Microsoft and other highest-echelon tech titans—an argument Wall Street has tepidly supported, even if Salesforce might have overpaid. It’s hard, too, to separate any stumbles at Slack and Tableau from the broader slowdown in SaaS sales, which have pummeled companies big and small throughout the sector.
Yet Benioff, renowned for cultivating an “Aloha Spirit” at Salesforce, can’t afford to let culture and leadership issues fester much longer. The newbies are restless—and it’s his job to calm the waters.
Want to send thoughts or suggestions to Data Sheet? Drop me a line here.
Jacob Carpenter
NEWSWORTHY
Silicon Valley’s newest darling. ChatGPT and DALL-E 2 creator OpenAI is negotiating share sales that would value the research lab at $29 billion and turn it into one of the most valuable U.S. startups, the Wall Street Journal reported Thursday. The latest deal would roughly double the valuation of OpenAI, which generated minimal revenue in 2022 but became a national sensation after releasing its much-acclaimed A.I. chatbot and text-to-image generator. Venture capital firms Founders Fund and Thrive Capital are discussing purchases of existing shares that could total $300 million.
Nothing to celebrate here. Samsung warned Friday that its holiday quarter profit likely fell to an eight-year low, the result of weakening memory chip and consumer electronics sales, CNBC reported. The South Korean tech giant forecasted fourth-quarter profits of $3.4 billion, a 69% year-over-year decline and the worst total since 2014. Samsung is expected to release detailed earnings data on Jan. 31.
A WhatsApp workaround. Meta-owned WhatsApp announced a new feature that allows users to circumvent censorship of the messaging service by repressive governments, the Washington Post reported Friday. WhatsApp officials said users will be able to access the internet through proxy servers, which bypass government-initiated firewalls and hide traffic data from internet providers. In announcing the update, WhatsApp leaders singled out the Iranian government, which limited access to the service last year amid anti-government protests roiling the republic.
Even cheaper in China. Tesla instituted its second price cut in three months for customers in China, a move designed to galvanize lagging sales in the electric-auto maker’s second-largest market. The discounts amount to 6% to 14% for Chinese customers buying Tesla’s two most popular vehicles, the Model 3 sedan and Model Y SUV. A source familiar with Tesla’s plans also confirmed price cuts for both models in Australia, Japan, and South Korea.
FOOD FOR THOUGHT
Can’t put politics aside. Facebook keeps finding it’s not easy to leave politics at the door. The Wall Street Journal reported Thursday that the Meta unit’s two-year quest to de-emphasize political content on Facebook produced multiple unintended consequences and failed to improve perceptions of the social media platform. Facebook executives sought to limit the viral spread of politically themed posts, primarily by tweaking its recommendation algorithm, following the 2020 election and subsequent attack on the U.S. Capitol. However, the effort led to decreased traffic for news websites, a decline in donations to nonprofits, and more complaints about misinformation spreading on the site.
From the article:
The plan was in line with calls from some of the company’s harshest critics, who have alleged that Facebook is either politically biased or commercially motivated to amplify hate and controversy. For years, advertisers and investors have pressed the company to clean up its messy role in politics, according to people familiar with those discussions.
It became apparent, though, that the plan to mute politics would have unintended consequences, according to internal research and people familiar with the project.
IN CASE YOU MISSED IT
What if Tesla loses Elon Musk? The company’s board faces growing pressure to prepare for the possibility, by Dana Hull, Jef Feeley, and Bloomberg
Fidelity is writing down its Twitter investment—will Sequoia and a16z be next? by Jessica Mathews
If you think your company isn’t a software company, you’re mistaken, according to McKinsey, by Sheryl Estrada
Thousands of former Twitter employees are set to receive severance agreements today, months after they were laid off, by Kylie Robison
Jeff Bezos could follow boomerang bosses Bob Iger and Howard Schultz and return to Amazon as CEO after 50% stock drop in 2022, analyst predicts, by Tristan Bove
The Winklevoss twins are in a big mess—and it has to do with crypto, by Will Daniel
To make the Global South more competitive, its leading companies must become A.I. national champions, by François Candelon, Maxime Courtaux, and Gaurav Jha
BEFORE YOU GO
Flights of fancy. The friendly skies are getting a little more pleasant for Delta flyers. The world’s largest airline announced Thursday that most of its U.S. flights will offer free wireless internet to members of its no-cost SkyMiles loyalty program, CNN reported. Delta officials said about 500 of the company’s 700 U.S.-based aircraft will offer the feature starting Feb. 1, with the remaining domestic planes equipped by the end of 2023 and international aircraft outfitted by 2024. CEO Ed Bastian, who unveiled the plan at CES, has heralded the arrival of free in-flight wireless internet for several years while cautioning that the technology needed to improve before a wide rollout.
This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
