During a nearly two-hour joint meeting Thursday to discuss the company’s plans for mass layoffs, Salesforce CEO Marc Benioff doubled down on a theme that infuriated some employees last month: that Salesforce employees, especially new hires during the pandemic, have a productivity problem.
And this time, he made a new suggestion — that younger employees who don’t come into the office might also be less productive, according to leaked audio of the meeting shared by Insider.
“We don’t have the same level of performance and productivity that we had in 2020 before the pandemic. We don’t,” Benioff said during the call. “When we look at a certain percentage of employees, especially some of the people who are new hires, they’re just not as productive.”
Benioff and his co-founder Parker Harris, also on the call, raised the issue to defend what became an uproar at the company in mid-December after Benioff suggested in an internal company-wide Slack message that new hires were less productive.
“New hires (hired during the pandemic in 2021 and 2022) in particular are facing much lower productivity,” he said on Slack, according to those messages seen and reported by Insider. Hundreds of employees responded to Benioff’s Slack message, many of them dismissing his claims.
Benioff responded to that pushback by doubling down on the claim and offering explanations and examples.
He told the more than 47,000 employees in attendance that he was inspired to post on Slack about worker productivity after COO and head of sales Brian Milham told him that 96 percent of the company’s annual contract value was delivered by 50 percent of sales executives. ACV is a way of measuring the annual revenue from each particular customer.
“Half of our sales force is not really productive and many of them are our new people. Why is that?” Benioff recounted the conversation. “Are we not managing our remote employees well enough? Do we need new skills? Because this has never happened before in the company’s history.”
Benioff also insisted that it’s not just because of a softening post-pandemic economy where users are spending less on software. He said the company is still closing big deals at a high rate, “but half of our sales organization is really struggling. It’s like they don’t know how,” he said. “There must be a few things going on either psychologically or technically.”
Benioff wondered aloud if telecommuting was a problem, especially for younger employees, “maybe they don’t build relationships,” he said, then wondered aloud if “younger employees don’t have the kind of social experience and meeting people and getting the kinds of swivel chairs that we used to have.”
Employees who heard their CEO repeat these accusations about the productivity of new hires, younger hires, remote hires—especially in sales—were not happy.
“He’s clearly a second-generation CEO,” one person said.
After hundreds of sales employees were laid off in November, several former and current employees told Insider at the time that they blamed Salesforce’s performance appraisal system, saying it created unrealistic goals with difficult accounts, setting them up for failure.
“Our sales performance process drives accountability,” a Salesforce spokesperson said in a statement to Insider at the time. “Unfortunately, this can lead to some leaving the business, and we support them in their transition.”
Benioff almost touched on those complaints when talking about Org 62, the name given to Salesforce’s own internal use of its flagship customer relationship management product, a tool that helps salespeople work more efficiently.
“Is it that we need to rebuild Org 62 with a greater sense of urgency?” Benioff said during the call.
Salesforce employees were upset by Benioff’s mention of the coming productivity gains, as they did so as part of a larger discussion about new job cuts, according to people present at the meeting and internal Slack messages reviewed by Insider.
For some, calls to be productive while the company implements mass layoffs have only served as a further barrier to productivity.
“I would say this is a lost week of productivity for Salesforce, ironically,” said a sales person who was present at the meeting.
Salesforce did not immediately respond to a request for additional comment.
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