• Some Salesforce employees have been offered a "Prompt Exit Package" instead of a layoff, with less severance.
• If they refuse, they will put on a PIP, sources say, a common step before termination in the industry.
• Employees say the company is ratcheting up performance expectations as activist investors invade.

Salesforce has increased performance pressure on some employees as it executes its plan to reduce its workforce by 10%, multiple current and former employees tell Insider. Workers aren't sure if performance-related terminations are part of that 10%, they say.

The company is planning to introduce new performance metrics for engineers and has already forced some salespeople to choose between a 30-day performance improvement plan (PIP) or a severance option called a "Prompt Exit Package," according to several current and former Salesforce employees. PIPs are commonly used in the tech industry as a step prior to firing someone. The PEP, on the other hand, is basically voluntarily quitting, but Salesforce offers two months of severance with it, according to an email viewed by Insider. 

"The company is pushing hard for productivity tracking and metrics on all facets," one employee told Insider. 

"Performance pressure and return to office became big themes," a former employee, who was laid off from Salesforce in February, said of their last few months with the company. 

One new metric Salesforce is planning to use to evaluate engineer productivity, the person said, is code check-ins, a controversial practice some say incentivizes quantity over quality and reduces trust between teams. A code check-in is when a developer makes a set of changes to a codebase.

The heightened focus on performance comes as the software giant works to shed 10% of its workforce, or some 7,000 people, after a two-year hiring spree. Salesforce increased its workforce from 57,000 to 73,000 in 2021, according to its annual report. 

The company notified some employees on January 4 that their jobs were being eliminated, and sent another round of notifications on February 2. Insider has reported that more than 4,000 people have likely been laid off so far, but Salesforce has not confirmed how many more employees it has actually cut, leaving its remaining workforce anxious for their jobs. 

Meanwhile, activist investors have been mobbing Salesforce, which has seen its market value shrink in half since its peak in 2021. Five such investors have revealed significant stakes since October, including Starboard Value and the feared Elliott Management, which is said to be mounting an effort to replace some board members, Reuters reports. Other activist investors include Mason Morfit's ValueAct, Jeff Ubben's Inclusive Capital, and Dan Loeb's Third Point Capital LLC, which just last week disclosed a stake. 

Activist investors typically want their targets to trim expenses and focus on more profitable businesses, rather than pursuing growth at all costs. Starboard first approached Salesforce this summer, spoke with some of its executives and pushed for cost-cutting measures. Salesforce cut a few hundred salespeople in November, a person familiar with the matter told Insider, and the company told Insider the cuts were made for "accountability," implying that performance was a consideration.

Employees worry that so much activist attention will result in more performance pressure or further layoffs which, insiders say, the company has already contemplated. Sources say there's been internal talk on whether to cut an additional 10% of staff later this year.

One Slack message sent by an employee after the first round of layoffs in January said that Salesforce has a goal to reach 25% operating margin by the 2026 fiscal year and asked execs at the time if the target was a factor in layoffs.

Meanwhile CEO Marc Benioff has also repeatedly mentioned productivity to employees when discussing the cuts. "We don't have the same level of performance and productivity that we had in 2020 before the pandemic. We do not," he said during an all-hands meeting in January after the first notices went out.

Less severance than those laid off

Workers who spoke to Insider are concerned that the company's increased focus on performance could mean more people will be targeted for a PEP, leaving them with less severance than their colleagues who were simply laid off.

Laid-off workers will be offered a minimum severance of five month's pay and possibly more based on tenure as well as other benefits like company-sponsored COBRA, Benioff wrote in a January email to employees announcing the restructuring.

But employees who have been targeted for a PEP are offered eight weeks of severance and company-sponsored healthcare benefits under COBRA. 

Employees are given two business days to elect the PEP option, according to an internal email viewed by Insider. If they don't choose the PEP, employees will then be allowed to view the 30-day PIP plan, which they then have to start within 3 days of declining the PEP offer. 

Around Thanksgiving, the company offered some sales employees who had been deemed underperforming in certain areas, such as annual contract value and pipeline generation, the option to start a 30-day PIP or accept the PEP and immediately leave the company. In some cases, the company has presented employees with PEP offers in the same week it has executed mass layoffs, employees told Insider.

Four Salesforce employees who spoke to Insider, including two who had been offered a PEP, said the option to choose between PEP or PIP feels like a way of pushing employees out of their jobs. 

"It's a shady optics play," said one person who was given a PIP or PEP offer last month. "From an outside perspective, it looks like these people quit."

They also said they felt like Salesforce had set some salespeople up to fail, saying the company expected them to hit unachievable quotas that bested their results during a pandemic-fueled boom for cloud software, even though the economy is weakening and post-pandemic demand is waning. 

"The markets we all work in are only so big," a recently laid-off Salesforce sales executive said.

It is unclear how many engineering employees have been affected by the new performance management system, or if PEP offers are being made outside of sales teams.

Changing a hard-to-fire culture

A former Salesforce executive who left the company in recent months told Insider that a push to accelerate the company's PIP system began in the fall. A common complaint held by Salesforce managers over the last decade has been that the system made it too difficult to fire underperforming employees, even if they were regularly labeled as such despite multiple changes in managers or roles.

The new performance management system implemented in the fall was designed to address those complaints, the former executive said, noting that it was "literally impossible" to manage anyone out of the company, including legitimately 'terrible' performers. 

"This is a classic enterprise performance improvement plan, but faster," they said of the company's new system. 

The sales employees who spoke to Insider say that plan has not worked out in practice, and has left the door open for colleagues they consider to be strong performers to be pushed out of the company. 

Salesforce did not respond to a request for comment.

Are you a Salesforce employee or do you have insight to share? Contact Ashley Stewart by sending a secure message from a nonwork device via Signal (+1-425-344-8242) or via email (astewart@insider.com). Contact Ellen Thomas via email (ethomas@insider.com) or send a secure message from a nonwork device on Signal: (+1-646-847-9416).

I've been looking for a driver who is qualified, reader. I'm Diamond Naga Siu, and I'm a little rusty at driving after taking public transportation for so long. Driving at night is especially nerve-racking, because I keep getting blinded by the lights.

It's happening much more frequently, and I thought my eyesight was for sure getting worse (it is). But the genuine culprit is more complex: light hues, misaligned headlights, and other vehicle quirks. My colleague Madison Hall illuminates the problem here.

Before we drive off into the night, let's jump into today's tech.

If this was forwarded to you, sign up here. get Insider's app here.

1. Salesforce performance pressure is on. Employees told Insider that the cloud company is about to drop new performance metrics for engineers. It's also trying to lower the headcount. Some salespeople had to choose between a "Prompt Exit Package" severance option or a 30-day performance improvement plan.

This is all part of a sprint to cut 10% of the workforce after going on a two-year hiring spree. Plus, multiple investors are believed to be pressuring Salesforce to cut additional costs to become more profitable.

More on the heightened tension at Salesforce here.

In other news:

2. Tech layoffs tell one story. Company headcount tells another. These six charts show how tech giants like Meta and Google have still grown, despite layoffs. Check them out here.

3. A woman doesn't want to prosecute her husband who is accused of purposely driving their family off a cliff. He is suspected of driving off a 250-foot cliff with his wife and two children inside a Tesla. The California doctor faces three attempted murder charges. More on the situation.

4. Microsoft really wants you to use Bing and ChatGPT. The company is throwing it back to the 90s. It's pushing people to set Bing as their default search engine. And it's trying to trade access to its augmented search engine for market share. Here's a breakdown of its desperation.

5. Hundreds of influencers revealed their rates for sponsored posts. New data revealed that the average rate for TikTok fell from $3,108 in 2021 to $2,947 a year later. Meanwhile, the costs of Instagram sponsored posts are rising. Get more insights on sponsored post rates.

6. The danger of putting computer chips in your brain. Elon Musk's neurotech startup has been working toward putting chips in people's brains since 2016. Other startups have been desparate to do so, too. But experts warn there are real dangers and unique ethical pitfalls. Dive into them here.

7. Leaked Amazon all-hands recording reveals CEO pep talk. On Tuesday, Andy Jassy urged employees to band together to get through this challenging time. He encouraged them to "redefine" the company and laid out how they can be successful. Get the full meeting breakdown.

8. Walmart forces employees to relocate or bounce. The retailer is cracking down on remote work. It closed tech hubs in California, Texas, and Oregon, and gave impacted employees two options: relocate or take severance. More on the employment ultimatum.

Odds and ends:

9. Beep Beep: Road trip with this couple in an EV. Axios reporter Joann Muller joined her husband on a 1,500-mile road trip in a Kia EV6. They didn't use heat — and stopped 12 times due to "range anxiety." Come along for the ride here.

10. Stop doing these things at Chinese takeout restaurants. Su-Jit Lin grew up working in her parents' American Chinese restaurant. She witnessed her parents facing racism and aggression while running their business. Here are nine things she wishes customers knew.

What we're watching today:

Curated by Diamond Naga Siu in San Diego. (Feedback or tips? Email dsiu@insider.com or tweet @diamondnagasiu) Edited by Dave Smith (tweet @redletterdave) in Toronto and Nathan Rennolds (tweet @ncrennolds) in London.

Salesforce has added new fields for gender identity and pronoun data across its product line, to help customers be more inclusive when it comes to collecting and using personal data.

The firm has launched two new fields across the Lead, Contact and Person Account objects on Salesforce. This opt-in addition lets customers and their users select, identify and capture pronoun options like he/him, she/her, they/them, and gender identity options like male, female, non-binary. Both fields also offer a ‘not listed’ option.

The fields are part of Salesforce’s core objects, which means they are populated through most of its products and available by default. 

Organizations from airlines to hotels, restaurants to government agencies and healthcare companies all need this type of personal data to be able to serve their customers accurately. Standardizing the fields removes the need for admins to create custom versions, so companies can capture more accurate customer data in a more efficient way. 

However, there is no pressure on customers to use the fields, as Salesforce's Chief Ethical and Humane Use Officer, Paula Goldman, explains:

We understand this data can be sensitive, so we've designed it with a walkthrough process for admins setting this up. There's guidance that says you don't always need to be collecting this data. In fact, there are some times when it may not be as appropriate to collect this data. Then admins would choose to include it or not include it, as they're setting up various instances of Salesforce.

Collaboration 

Salesforce worked in close contact with its Inclusive Language Steering Committee to develop the gender inclusive features. This included members of Outforce, the company’s LGBTQ+ employee resource group, and Out and Equal, an Oakland-based organization working on LGBTQ+ workplace equality. 

Working in collaboration with relevant groups is a standard approach at Salesforce’s Office of Ethical and Humane Use. One of its core pillars is ethics and inclusion in Salesforce products, so the Office works hard to ensure the products the firm delivers are inclusive and accessible to all. Goldman says:

A core way we do that is knowing that I as an individual and my team, we don't have all the answers, and nor necessarily do the teams that are working on these specific products. Participation and gaining insight from folks that live these experiences directly is very important. That's why we worked both with our Employee Resource Group to understand first of all - what's the problem; second - what's the right solution, what's the right language to learn, which of these terms are the most important to address. 

Similarly with outside experts, if our whole goal is inclusion in our product, then we need to be inclusive in the processes that lead to these outcomes as well. We need to be bringing in this expertise and designing based on that expertise.

Using the right identifiers is a key part of building trust with users, but the standard options in data systems and CRM tools don’t always capture peoples’ full identity, or make it simple to do so. By making these new fields available, firms can use the gender inclusive features they prefer, and if they don’t need or want to collect gender-related data, they can bypass the features. Goldman notes:

For airlines or hotels or restaurants, which are giving personalized experiences to their customers, they don't want to be making a mistake on sensitive data like this. They want to be giving the correct experiences to their customers and serving them well. If they were to make an error on something like this, you can imagine how that would break trust.

Conversely, when people feel included, they’re more likely to trust the company they're interacting with. Goldman adds:

Study after study shows that when people trust companies, they're willing to share more data. That in turn feeds a more accurate and trusted personalized experience with the company, which feeds the sort of data they're willing to share.

At a time when first-party data is so crucial for companies wanting to serve and market in different segments, this model creates a virtuous loop where they're going to have more customer loyalty and trust, and be able to better serve their customers. 

Ethical

The new identity fields are part of Salesforce’s ongoing efforts to develop and promote ethical and inclusive technology. The firm had already made updates to its technical language in 2021 to address implicit bias and increase racial inclusivity. Goldman says:

We spent a long time remediating language in our code and our product around racial terms, like master and slave or blacklist and whitelist, and replacing those with more inclusive terms.

Ethics and inclusivity are embedded across product development at the company, she adds. For example, in the area of Artificial Intelligence, Salesforce aims to ensure that the data sets it’s using to train models are representative of the populations it’s serving and as free from bias as possible. 

The firm also puts intentional defaults in its products to make them as inclusive as possible. During the pandemic, one of the products it was developing for vaccination campaigns offered default pick lists associated with that product type. Goldman adds:

We decided that we shouldn't make an address field mandatory for people that wanted to sign up for vaccine. Why? Because if you are unhoused, that might exclude you from getting access to the thing that you're signing up for. Oftentimes it's these small design decisions that can make a world of difference in how inclusive products are when they launch and are used in the world.

My take

A positive move. 

Search startup You.com has debuted an artificial intelligence chatbot that can provide natural language answers to user queries, as well as surface related items such as code snippets and graphs.

TechCrunch reported the launch of the chatbot today.

Palo Alto, California-based You.com is a venture-backed startup that competes with Google LLC and Microsoft Corp.’s Bing in the search market. Its search engine, also called You.com, has drawn $45 million in funding from Salesforce Inc. founder Marc Benioff, Norwest Venture Partners and other investors.

Last December, You.com rolled out an AI chatbot called YouChat that can answer user questions in a natural language format. It’s based on an internally developed large language model called C-A-L. The new multimodal search chatbot You.com debuted today is an upgraded version of YouChat. 

Other conversational AI tools, such as OpenAI’s ChatGPT, focus primarily on providing text-based answers to user queries. According to You.com, its new multimodal chatbot not only generates text answers but also surfaces other types of data in response to search queries. 

When users search for the current price of a company’s shares, YouChat can return a live stock chart. If a developer is seeking assistance with a programming task, YouChat is capable of generating software code. The chatbot can also return images, videos, spreadsheet tables and other items in response to user queries.

You.com displays contextual information related to a user’s query in a sidebar next to the primary search results. The sidebar might, for example, display links to websites explaining Python coding concepts if a user enters a search query related to the programming language.

On occasion of its multimodal chatbot’s launch, You.com told TechCrunch that its search engine has millions of daily users. Moreover, the startup is said to be experiencing “double-digit percentage growth” every month. You.com is reportedly exploring the possibility of making money from its search engine by selling paid AI add-ons and enabling other companies to offer applications to users.

Multimodal search has also emerged as a priority for You.com’s top competitor. At an AI event last week, Google previewed a feature that will enable users to create search queries that combine an image with a text snippet. A user could, for example, input a photo of a desk and the text snippet “matching chair” to find e-commerce stores offering chairs with a similar design.

This month, both Google and Microsoft announced plans to equip their respective search engines with conversational chatbots. Google’s chatbot is based on an internally developed neural network called LaMDA. Microsoft, in turn, is using technology from OpenAI.

Image: You

It’s been a forgettable past year for shares of Salesforce (NYSE:CRM) and its CEO Marc Benioff. With big layoffs, macro headwinds, and slowed growth weighing on sentiment, questions linger as to whether activist investor involvement can help the cloud giant return to its former glory in a hostile environment for tech. Despite the headwinds and sagging share price, I remain bullish as a handful of activists look to extract value amid the firm’s journey to Excellerate its margins.

Activists are Right to Push for Change

Benioff may be a smart top boss, but it hasn’t all been smooth sailing for the cloud-based SaaS (Software-as-a-Service) pioneer over the past few years. In a span of around five years, two co-CEOs (Bret Taylor and Keith Block) stepped up alongside Benioff, only to step down soon after. In the case of Taylor, it was incredibly soon after.

Such moves do not inspire my confidence in the company’s succession plans. Further, I think activism is needed to help the software behemoth that may have wandered too far off the trail.

It isn’t just co-CEO exits that I find troubling. In December, the untimely departure of Slack founder Stewart Butterfield left a pretty bad taste in the mouths of investors as shares crumbled to multi-year lows. Tableau CEO Mark Nelson also stepped down, marking the third big resignation in just a few days.

Salesforce’s Slack and Tableau acquisitions didn’t come cheap. However, I was willing to give the cloud giant the benefit of the doubt. After all, Salesforce wasn’t just acquiring popular platforms and their customers but also the talent working hard at each acquired firm.

Now that Butterfield and Nelson have departed alongside thousands of other employees amid Salesforce’s corporate restructuring, the firm has shed quite a bit of talent. Whether the leaner, low-rate-world version of Salesforce can continue to grow while improving profitability metrics remains to be seen.

Morgan Stanley (NYSE:MS) analyst Keith Weiss seems to think Salesforce’s earnings could receive a jolt following mass layoffs and activism. In a recent note, Weiss sees a “significant opportunity” for the company to “improve efficiency,” with expectations for growth to “return to at least market growth” of 13% alongside “non-GAAP operating margins nicely above 30%.”

I think Morgan Stanley is right about Salesforce as it looks to go from full-on growth mode to margin-enhancement mode with a bit of help from three well-known activists. There seems to be quite a bit of locked-up value that may need the help of an outsider to squeeze out.

More Gains Could be Ahead for CRM Stock

Salesforce stock has been on a roll so far this year. With potential catalysts (activists and a greater margin-centric focus) in sight, 2023 may be the year the firm regains investors’ faith. Year-to-date, Salesforce stock is up 27%. Sure, the broader basket of tech stocks is up considerably on the year. However, I think the hope produced by activists is a bigger contributor to CRM stock’s steep ricochet off the bottom.

Even after its significant bounce off December’s lows, CRM stock is still 45% away from its late-2021 peak. Such levels may not be as far out of sight as they seem, especially if activists Starboard and Elliot Capital Management have their way.

Undoubtedly, the acquisition of Slack was met with investor distaste back in 2021. The deal was expensive ($27.7 billion), seemingly untimely, and acted as quite an overhang on the stock.

Still, I think there’s a good chance activists pressure Salesforce to divest some of its past acquisitions, including Slack, to unlock value. However, given how far tech valuations have plunged over the past year, it’s doubtful that Salesforce will get anything in the ballpark of $28 billion.

Regardless, the fate of Slack (and possibly Tableau) could be up in the air as activists look to disrupt Salesforce’s original plans. In any case, the recent departures of top bosses from both acquired firms could imply big changes up ahead for Slack and Tableau.

Is CRM Stock a Buy, According to Analysts?

Turning to Wall Street, CRM stock comes in as a Moderate Buy. Out of 36 analyst ratings, there are 25 Buys, 10 Holds, and one Sell recommendation.

The average Salesforce stock price target is $190.77, implying an upside of 11.5%. Analyst price targets range from a low of $119.00 per share to a high of $300.00 per share.

The Bottom Line on Salesforce Stock

After the latest round of employee exits, I think activist investors are right to step in to lend a helping hand. Investors seem to applaud the activism, given the stock’s January jump.

At this juncture, expectations are quite muted, with a looming recession likely to pave the way for more rocky quarters. As activists look to work their magic, the stage may be set for positive surprises, with or without significant divestitures.

Disclosure

Startup has raised $5M to eliminate data silos by enabling Salesforce to be the source of truth for product information

CHICAGO, Feb. 7, 2023 /PRNewswire/ -- Pimly, the first ever Product Cloud, makes Salesforce the source of truth for critical product information allowing employees, prospects, partners and customers to become experts on product information.

Mike Milburn left his role as Chief Customer Officer working for Marc Benioff at Salesforce and teamed up with veteran Salesforce architect and entrepreneur, founder of Etherios and Aleysian, Mike Dannenfeldt to re-define Product Information Management. The platform is now live and generally available in the Salesforce AppExchange.

"Most Product Information Management (PIM) tools on the market introduce yet another data silo into an organization that only a small number of employees access," notes co-Founder Mike Dannenfeldt. "By bringing a 360-degree view of product information into Salesforce CRM, Pimly solves the data silo problem and distributes always-on, always-accurate product information to all company stakeholders that drive results."

"At Salesforce, we disrupted the global Customer and Field Service Industries, and we are doing it again with Pimly," says Mike Milburn. "Salesforce is an incredible platform, since Pimly is built on core, (Sales Cloud, Service Cloud, Lightning Commerce, Order Management, etc.) every user can get the benefits of Pimly with clicks not code."

Pimly's mission to build the next great B2B SaaS company, headquartered in Chicago, has been so enthusiastically received that Pimly completed a $5M seed round led by Mike Fitzgerald and High Alpha. Other investors in the round include Hyde Park Angels (HPA), Handshake Ventures, and Dan Dal Degan (CEO of SpringCM and former Salesforce EVP Sales).

Mike Fitzgerald, Partner at High Alpha shared, "Mike and Mike are proven business builders who have spent years laying the foundation for this business. Their vision for Pimly is grounded in experience serving sophisticated customers throughout the Salesforce ecosystem who need a new solution for managing product information. We are thrilled to lead the investment and support the team."

Story continues

"Pimly has an exceptional team that is disrupting a fast growing and dynamic market," said Erik Severinghaus, the HPA deal lead. "I couldn't be more excited to be partnering with them to transform how customers interact with products digitally."

The financing will enable Pimly to drive further growth in the Go-to-Market and Product Teams. Pimly will advance its technology in the Sales, Service, Commerce and Industry Salesforce Clouds to deliver customer success.

Seedbox Solution, an innovator in the agricultural packaging industry chose Pimly for its first Product Information Management System. Joe Waldman, Director of Growth for Seedbox Solution said, "We standardized our CRM on Salesforce and needed to enable our Sales and Services teams on our products. Pimly provides a simple way to unify all our product information including images, videos, technical specifications and installation information into one system. The DNA of Seedbox is our breadth of seed packaging products. Pimly furthers our commitment to our customers by having this data accessible to every employee 24x7."

About Pimly

Pimly is a modern Product Information Management solution that brings all of your product information into Salesforce to easily manage and utilize product data and digital assets across your Salesforce clouds. Now you can create world-class customer experiences because every client-facing team member sees the same, accurate information. Visit pimly.co for more information or go to Pimly on the Salesforce AppExchange to get started now.

About High Alpha

High Alpha is a leading venture studio that conceives, launches and scales next-generation B2B SaaS companies. Founded in 2015 by tech veterans Scott Dorsey, Eric Tobias, Mike Fitzgerald and Kristian Andersen, the Indianapolis-based firm pioneered the venture studio model. To date High Alpha has raised $250M across three funds from leading enterprise software investors and has launched and invested in more than 70 startups, including Lessonly, Socio, Attentive, SalesLoft, Zylo, Terminus, The Mom Project, Rheaply, LogicGate, MetaCX, Mandolin, project44 and more. For more information, visit highalpha.com or follow on Twitter @highalpha.

About HPA

HPA is a leading early-stage investor. Our People First model leverages world-class operating expertise, a powerful business network, and venture capital to fuel startup success. As a result, our founders transform their businesses into industry leaders, our investors generate best-in-class returns, and our community experiences job creation and economic growth.

Contact: Erica Lanyon, Pimly
Phone: 512.785.9018
Email: elanyon@pimly.co

View original content to get multimedia:https://www.prnewswire.com/news-releases/pimly-launches-the-product-cloud-the-first-salesforce-native-product-information-management-platform-301739734.html

SOURCE Pimly

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