An acquisition can mean different things for the company that is acquired, but very often, the change in ownership leads to job cuts. Salesforce has announced layoffs at Own, a data-management startup that was recently taken over by the customer relationship management company.
Salesforce is planning to cut 700 Own staff members to better manage the resources the company now has at its disposal. A large number of the cuts will take place by the end of January 2025. The other members affected by Salesforce’s workforce reduction plan should hear more in the 3-12 period following the acquisition as they will be required to support the transition period until things settle down.
Image: Salesforce
Salesforce’s “Own” Layoffs Will See Around 700 Employees Make Their Exit
Own, formerly known as OwnBackup, was a startup that was valued at $3.35 billion in a funding round conducted in 2021. Salesforce Ventures had been an investor in the company back then, clearly showing its interest in the company’s business. In early September 2024, Salesforce formally announced its interest in acquiring the company, offering $1.9 billion for the company. On Monday, Own took to LinkedIn to announce that the deal had been closed.
The deal with Own is said to be Salesforce’s biggest acquisition since it took over Slack. The $1.9 billion transaction included the 1,000 employees at Own, but Salesforce is set to cut 700 jobs as they only require part of the force to keep their projects running.
This Isn’t Salesforce’s First Major Acquisition or Layoff
Salesforce has been relentless in its search for new companies to add to its forces and has focused heavily on mergers and acquisitions over the years. The company acquired Slack in a megadeal amounting to $27.7 billion in 2020, and called it a “once-in-a-generation opportunity to rethink and reshape how and where we work.” Salesforce wanted to create an innovative digital HQ that had everything it needed in one place, by “creating the business operating system for the new world of work.”
Unfortunately, Salesforce’s workforce reduction strategy came into effect within 18 months, with the company deciding to eliminate 10% of its workers, which amounted to around 7,000 jobs. “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Salesforce CEO Marc Benioff had said at the time.
Salesforce received even more flack over its 2020 acquisition of popular company Tableau and the eventual layoffs that took place there as well. Employees, or the “DataFam” as they referred to themselves, mourned the loss of the company culture that had occurred since the acquisition.
Salesforce 2024 Strategy Shift
Salesforce’s Own Company layoffs, while not out of character, are surprising considering its immediate execution. The Salesforce 2024 strategy shift of paring down the workforce immediately shows that the organization is planning to maintain a tighter grip on its new business and ensure that it is made productive immediately.
The company’s earlier acquisitions received criticism from activist investors in 2022, following which Salesforce eliminated its mergers and acquisition committee and devoted itself to being more prudent about its investments.
As Salesforce cuts 700 of Own’s staff, the company is also looking into hiring around 1,000 people who can help with marketing and selling its genAI products. So as the doors at Salesforce close for some, it appears to be opening up for many others.
