Twitter’s cost-cutting measures puts pressure on Salesforce

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Twitter’s recent adoption of a new SaaS platform, as well as a contract reduction from $20 million to around $5 million in line with the headcount reduction, has had unintended consequences for its service provider, Salesforce.

Salesforce, which was already having a difficult financial quarter, has been hard hit by Twitter’s reduced expenditure, with a significant loss in revenue as a result of the move. Salesforce employees have been offered Performance Improvement Plans (PIPs) and prompt exit packages as a result of Twitter’s decision. According to Business Insider, workers are bracing for another round of layoffs, which could affect 10% of the company.

Third Point Capital also became the fifth activist investor to declare an interest in Salesforce last week, joining Mason Morfit’s ValueAct, Jeff Ubben’s Inclusive Capital, Dan Loeb’s Third Point LLC, and Elliott Management, which first revealed their interest in the company in January.

Salesforce was already facing challenges prior to Twitter’s actions, such as competition from other companies and investor pressure to increase profits. Twitter’s cost-cutting measures have only exacerbated the company’s pre-existing problems. As a result, Salesforce has implemented Performance Improvement Plans (PIPs) for its employees in order to assist underperforming employees in improving their work and meeting the company’s expectations. Exit packages have also been offered to some employees in order to cut costs and streamline operations.

Salesforce is planning to roll out new performance metrics for engineers, while some salespeople have been given the option of a 30-day performance improvement plan (PIP) or a severance option known as a “Prompt Exit Package,” according to Business Insider.

The sources for this piece include an article in TheRegister.


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