Tech woes: Salesforce cuts local investment arm after Amazon, Google and Microsoft sack staff
The US technology conglomerate, led by Marc Benioff, has axed its local venture capital arm as part of a major restructuring.
US tech giant Salesforce has axed its local investment arm, just months after the fund invested a multimillion dollar sum in a start-up which aims to reduce the hiring and firing of staff.
The technology firm is understood to have laid off the entire local team at Salesforce Ventures, three months after it poured $17m into Australian start-up Reejig.
A local spokesman confirmed that Salesforce Ventures’ US team would handle all Australian investments moving forward.
“We will manage our investments from the US and continue to engage with our 17 portfolio companies and the local start-up and venture capital ecosystem. We will continue to make new and follow-on investments in the Australian market,” he said.
Salesforce Ventures has invested over $US5bn ($7.02bn) since it was founded in 2009, including $US1bn which was invested in the 12-months leading up to July last year.
At the time, the fund had 45 staff who worked out of San Francisco, New York, London, San Diego, Tokyo and Sydney.
It’s not yet known whether Salesforce has dismantled its teams in Tokyo and London and shifted management to the US, as it has now done in Australia.
Earlier this month, chief executive Marc Benioff said Salesforce needed to take “a more measured approach to purchasing decisions.”
Salesforce would not disclose how many Australian workers would be affected by the lay-offs, and attempts to find out were met with some difficulty, as members of its local public relations team have also been caught up in the lay-offs.
“The email account that you tried to reach is disabled,” read an email returned to The Australian on Monday.
It’s understood internal communications surrounding the lay-offs have in some cases been abrupt.
Salesforce lay-offs were the fourth highest of any company globally this month, and make up about 7 per cent of the 90,430 workers laid off in January, according to lay-off tracker website TrueUp.
Ahead of the company were Amazon, Google and Microsoft who, laid off the most staff, which together totalled 40,000.
Salesforce was also one of the most generous, affording 20 weeks severance pay to staff, according to TrueUp.
Salesforce’s “restructure plan” – which will affect about 7000 staff – will cost the company as much as $US2.1bn, according to reports.
“These charges consist primarily of $US1.0bn to $US1.4bn in charges related to employee transition, severance payments, employee benefits, and share-based compensation; and $US450m to $US650m in exit charges associated with the office space reductions,” read filings to the United States Securities and Exchange Commission.
In a letter to staff earlier in January, Mr Benioff took responsibility for the lay-offs.
“I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” he said.
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