Salesforce Guts Tableau After Spending $15.7 Billion in 2019 Deal

Salesforce Inc. division Tableau was hit harder than other units in the company’s largest-ever round of jobs cuts last week, adding to a major reorganisation that signals the $15.7 billion acquisition hasn’t lived up to expectations.

Mark Nelson, Chief Executive Officer was ousted from the data analytics division in late December and more senior staff were axed Wednesday as part of Salesforce’s announcement that it would eliminate 10% of its workforce. Job reductions at Tableau were greater, proportionally, than the company at large thus far.

After a half-decade of fast hiring and large acquisitions, Salesforce is trying to cut costs and better integrate the companies it has purchased. The software maker, which lost almost half of its value in 2022, has been pressured by investors to improve profit. The job cuts made public Wednesday — about 8,000 workers — are less than half of the number of employees hired in the pandemic and followed the announced exit in December of co-CEO Bret Taylor and the elimination of hundreds of sales positions in November.

Acquisitions fuelled the company’s headcount growth. Tableau, then Salesforce’s most expensive deal when it was bought in 2019, came with 4,200 employees while Slack, purchased in 2021, and MuleSoft, acquired in 2018, together brought another 3,700, according to company filings. The three deals combined cost almost $50 billion with the estimated $27.7 billion for Slack leading the way. Workers across these acquired divisions were pummelled by the job reductions, particularly in recruiting and customer success roles, according to company employees.

Tableau is increasingly being treated as a visualization tool for data contained in Salesforce’s other services rather than a standalone program — co-founder and CEO Marc Benioff highlighted the new integrations in a December keynote speech. The division has trailed the rest of the company in sales growth since the acquisition

“It makes a lot of sense to me that Tableau would have a disproportionate contribution to this layoff,” said John DiFucci of Guggenheim Research, who has covered Salesforce as an analyst for 12 years. “That company was not growing new business when they bought it, and they paid a lot.”

Salesforce also plans to pare back its office footprint. The company currently has four offices in the Seattle area, more than any other city, according to the company website. Three were inherited in the Tableau deal. Salesforce declined to comment on whether it would be reducing space in the Seattle area.

Asked about the effect of Wednesday’s job cuts on Tableau, a Salesforce spokesperson said the unit “is a vital part of our product strategy.” Tableau contributes to a product that “processes over 100 billion customer records, and helps our customers understand and act on their data,” the spokesperson said.

Tableau and the other major acquired units are being reorganized, with the departure of many of the original executives brought on board in the deals. Last month, three top Slack executives including co-founder and CEO Stewart Butterfield said they were leaving and the division is now led by Lidiane Jones, who was a Salesforce executive. 

For the full article, please click below:

Salesforce (CRM) Guts Tableau After Spending $15.7 Billion in 2019 Deal – Bloomberg

For the latest industry news, click here: