Salesforce is cutting around 1,000 jobs, or 2 percent of its workforce, despite a massive earnings report that raised the company's stock, CNBC reported. The cuts come even though Saleforce stock soared 26 percent to a record-high $272.32 Wednesday (Aug. 26).
The company said it is "reallocating resources to position the company for continued growth," according to CNBC. "This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities," the company said.
The employees suffering the cuts will be given 60 days to find a new job in the company and will be able to use internal resources to do so, CNBC reported, citing a source. Those who don't land new positions will be offered severance packages and benefits for six months.
Salesforce CEO Marc Benioff said in March that the company wouldn't lay off employees for 90 days while the pandemic was shutting down the economy en masse. That period ended, however, around the end of June. Salesforce Chief Financial Officer Mark Hawkins said the company is making "strategic shifts" that partially show the impact of the pandemic and how people work now.
The stock, as the company's record highest, will be entered into the Dow Jones Industrial Average, which will go into effect next week. The company reported a quarterly profit of $2.63 billion on revenue of $5.15 billion, with 29 percent growth in revenue from last year, CNBC wrote.
Salesforce said it expects revenue of around $20.7 billion or $20.8 billion in its current fiscal year ending January 31, 2021.
Salesforce is replacing Exxon Mobil on the Dow, which has said it is looking to represent new types of businesses that better reflect how the American economy is right now. The tech sector, which has accounted for around a quarter of the Dow, is seeing larger market caps. Salesforce's is around $200 billion — a 50 percent jump since the lows of March.