Are the Salesforce Layoffs Good or Bad for CRM Stock?


  • Salesforce (CRM) layoffs are splitting investors in CRM stock.
  • Some believe the cost cuts are a positive for the company.
  • Others see slowing growth as the greater concern for Salesforce.
Salesforce layoffs. Close up of Salesforce (CRM stock) logo displayed on one of their towers in downtown San Francisco

Source: Sundry Photography /

Salesforce (NYSE:CRM) layoffs continue to be a hot topic with traders today after the company announced a 10% reduction to its workforce.

While that news was announced earlier this week, investors are still debating whether it’s the right move for the cloud-based software company. After all, the move will cost Salesforce between $1.4 billion and $2.1 billion while also closing down multiple offices.

Those arguing for the job cuts see the reduction in spending as a positive. That makes sense, considering the fact that many companies are reducing their cloud usage as they also lay off employees. However, not all people agree.

The Argument Against Salesforce Layoffs

One argument against the job cuts is that Salesforce is already dealing with slowing growth. Reducing the headcount could cause growth to further slow, which might not end well for the company.

On top of that, Salesforce is also dealing with leadership problems. For one, co-CEO Bret Taylor left after one year. Slack CEO Stewart Butterfield also suddenly left the company. These could be signs that headcount reductions may be the least of CRM stock’s worries.

For now, though, investors seem pleased with the layoff plans. CRM stock has rallied over the last few days and is up 2% as of Friday afternoon. Some 3 million shares have changed hands as of this writing, below the daily average of 9 million shares.

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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