Salesforce Will Lay Off 10% of Its Workforce, but That's Not Why I'm Holding On to the Stock
Given both the market turmoil and the internal developments taking place over at Salesforce (NYSE: CRM), mass layoffs were inevitable. The cloud-based software pioneer announced it would be cutting about 10% of its workforce (the company employed nearly 80,000 worldwide as of last report) as it begins to scale back its early-pandemic hiring frenzy.
It's not just Salesforce. With a recession looming in 2023 and organizations around the world getting increasingly cautious about spending, big-tech growth rates have begun to slow dramatically. Focus has shifted away from generating revenue and instead moved to maximizing bottom-line profit. Laying off 1/10th of the workforce won't be a quick fix for Salesforce's profitability, so that's not why I'm sticking with my stake in the business. I don't think layoffs are why you should be a Salesforce shareholder, either.
The market rewarded Salesforce's layoff news with an initial 5% rebound in stock price. Collective investor mindset can be an ugly thing. In the never-ending search for profit, people who recently started a career at Salesforce (and some longer-tenured employees too) are now out of a job.
Source Fool.com
