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Salesforce layoffs evidence Tableau has lost independence

The analytics vendor was significantly affected by the CRM giant's latest staff cut, which comes on the heels of an exodus of executives from Tableau that included its former CEO.

Tableau was largely unscathed when Salesforce executed a round of layoffs in 2020.

That was not the case on Wednesday when the CRM giant laid off 10% of its staff, a development that further illustrates Tableau's evolution from independent entity within Salesforce to just another subsidiary.

Salesforce CEO Marc Benioff sent a companywide email at approximately 3 a.m. PST on Wednesday informing Salesforce's estimated 80,000 employees that the company planned to lay off staff. He cited overhiring during the COVID-19 pandemic and the subsequent economic downturn as the primary reason.

"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," he wrote in a message disclosed in a filing with the Securities and Exchange Commission. "Within the next hour, employees who are initially affected by this decision will receive an email letting them know."

In the ensuing hours, about 8,000 employees received emails informing them that their jobs were being eliminated, including many who worked for Tableau.

Tableau hit by Salesforce layoffs

Salesforce acquired Tableau, an analytics vendor founded in 2003 and based in Seattle, for $15.7 billion in June 2019. And for much of the next three years, Salesforce appeared to change little at Tableau.

The two worked together to develop technological integrations, but Tableau remained under the leadership of its own president and CEO, who reported to Salesforce. Tableau was only mildly affected when Salesforce laid off about 1,000 employees in August 2020.

Salesforce has not publicized a breakdown of Wednesday's layoffs to illustrate how many from Tableau, Slack, MuleSoft and other subsidiaries were affected. But according to multiple reports, Tableau's staff of slightly more than 4,000 was ravaged.

In response to the layoffs, former Tableau chief data officer Wendy Turner-Williams -- whose role was eliminated in November 2022 -- posted on LinkedIn that she was starting a Slack channel to assist those from Salesforce who had been laid off.

As of Friday morning, the post had received nearly 750 likes.

Neal Myrick was perhaps the most prominent longtime Tableau employee to publicly acknowledge he had been laid off on Wednesday. Myrick was global head of the Tableau Foundation through June 2022 before being repurposed as vice president of transformative philanthropy at Salesforce.

Beyond Wednesday's layoffs, in the two-plus years since Salesforce's 2020 layoffs, there's been an exodus of leadership from Tableau: Mark Jewett, senior vice president of product and partner marketing, in late 2021; Andrew Beers, CTO, in June 2022; and Mark Nelson, president and CEO, in December 2022.

When Nelson resigned, Salesforce elected not to appoint a replacement. Instead, the product and engineering teams at Tableau that previously reported to Nelson now report to Salesforce personnel.

There was an exodus of Tableau execs last year. Now we're seeing the broad cuts.
Doug HenschenAnalyst, Constellation Research

The layoffs at Tableau, therefore, did not come as a surprise to analysts. They noted that Salesforce's move to cut Tableau staff further demonstrates that the analytics vendor's independence is gone, and it is now just another Salesforce subsidiary.

"Tableau is part of Salesforce, and the layoffs at Salesforce started last year, so no, I'm not at all surprised that they've reached Tableau," said Doug Henschen, an analyst at Constellation Research. "There was an exodus of Tableau execs last year. Now we're seeing the broad cuts."

He added that the economic downturn has led consumers to cut back on software investments, which has subsequently led to slower growth for companies such as Salesforce and its subsidiaries.

Salesforce's revenue from its data assets -- which includes Tableau -- was up only about 10% through the first nine months of its fiscal year. The increase is less than half of its growth through the first nine months of fiscal 2022.

"With all the talk of recession, customers of Salesforce and Tableau are cutting back where they can, and new investments in software and services are an early casualty," Henschen said.

Similarly, David Menninger, an analyst at Ventana Research, said the layoffs -- both overall at Salesforce and within Tableau -- did not come as a surprise.

He noted that the current economic downturn has led many tech companies to lay off staff in recent months, including Amazon, which laid off 10,000 workers in November 2022 and another 8,000 the same day as Salesforce this week.

"I had no [advance] knowledge or guess that layoffs were likely at Tableau, but if you look around the tech industry, it really shouldn't come as a surprise," Menninger said. "Many big tech companies have had sizable layoffs given the current economic situation."

Loss of culture

When Salesforce acquired Tableau, CEOs Marc Benioff of Salesforce and Adam Selipsky -- formerly of Tableau, now CEO of AWS -- talked about cultural fit. But according to one Tableau employee who was laid off, Salesforce executed its layoffs in a manner that contrasted with Tableau's ethos of a data family.

The person, who spoke on condition of anonymity because they are technically still employed by Tableau for the next few months as part of their severance package, saw the initial message from Benioff when they first checked their email on Wednesday morning.

Moments later, they received a blast email from HR telling them their role had been eliminated.

"There was no one-on-one interaction with HR," the person said, noting that a message from their direct supervisor following the email from HR was the only personal interaction they had related to being laid off.

They added that they understood the lack of personal interaction, given the volume of people who were laid off. However, the employee noted that they had previously worked at a company twice the size of Salesforce that had laid off people in multiple rounds, and each time all those laid off had been met with individually as part of the process.

"I get it, to a certain extent, because of the sheer number [of layoffs]," the employee said. "But I also find it pretty disingenuous."

The person did note that they received a generous severance package that includes technically remaining employed by Salesforce for nearly three more months -- including benefits -- and 15 weeks of pay after that.

But even that generosity left the person wondering why Salesforce laid off such a large number of people despite seemingly solid earnings and apparent cash on hand.

"Despite all that's gone on, [the severance package shows] they still have money to burn," the employee said.

Reality check

While Salesforce might still have plenty of cash, the cold truth is that layoffs are a corporate reality during difficult economic times, Menninger said.

And that applies whether a company like Tableau claims to be a data family or Salesforce calls its culture Ohana, a Hawaiian term meaning "family."

"Large companies are constantly reevaluating their staffing," Menninger said. "It's a painful process. But there is generally some room to reduce staffing, particularly after large periods of growth."

Early in Menninger's career, he worked at Oracle, which recently laid off staff of its own. And during his time at the company, he said layoffs were a constant.

"Every year, we would be asked to rank all our employees from top to bottom, and the bottom 10% would be let go," he said.

Henschen, meanwhile, noted that despite Tableau's loss of independence and whatever effect the Salesforce layoffs will have on its staff, the analytics vendor continues to have strong brand recognition.

In addition, throughout the loss of the positions once held by Nelson, Beers, Turner-Williams and others, Tableau has continued to develop new tools for its platform that have been well received.

In June, the vendor launched Data Stories, a new data storytelling tool that resulted from its 2021 acquisition of Narrative Science. And other 2022 updates focused on embedded analytics and automated actions.

"Tableau's future was already apparent before these layoffs: The leadership is within Salesforce, and ... planning for future products is now considered in the context of Salesforce's data and analytics portfolio," Henschen said. "Tableau remains a very strong brand with a loyal customer base, but management has to make sure it integrates with, complements and extends the total Salesforce portfolio."

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