Salesforce Is Cutting Back on Hiring Engineers Thanks to AI
AI has enabled Salesforce to reduce hiring and save millions, but it's using the savings to hire in other areas.
Salesforce has recently leveraged AI tools internally to hire fewer workers in certain divisions and more in others.
"We have reduced some of our hiring needs," Salesforce's chief financial and operations officer Robin Washington said on Wednesday on a call with analysts, per Bloomberg. She credited the implementation of AI tools for the slowed hiring.
According to Washington, AI has enabled Salesforce to reassign 500 customer service workers to other roles at the company this year, resulting in a cost savings of $50 million. The company is also hiring fewer software engineers as its current staff use AI to become more productive.
Related: 'Amazing Momentum': Here's Why Salesforce Is Hiring 1,000 New Employees
At the same time, Salesforce is ramping up its efforts to hire more salespeople to sell its AI products and other offerings. Chief revenue officer Miguel Milano said on the analyst call that the company now has around 13,000 salespeople and wants to expand the number by 22% this year. Salesforce currently has 76,453 total employees globally.
Salesforce CEO Marc Benioff. Photo by Halil Sagirkaya/Anadolu via Getty Images
Other tech companies are using AI to help with tasks ranging from engineering to reporting earnings. Microsoft CEO Satya Nadella stated last month that engineers at the company are using AI to write about 30% of new code. Google CEO Sundar Pichai said in the same month that the company was using AI to write more than 30% of new code, up from 25% in October. Meanwhile, Klarna, a company that has said its AI chatbot does the work of 700 customer service agents, reported earnings last week using an AI avatar of its CEO.
Goldman Sachs predicts that 300 million jobs across the globe could be lost or downgraded due to AI by 2030.
Salesforce isn't the only company to ramp up hiring in some areas and cut back in others, thanks to AI. IBM CEO Arvind Krishna told The Wall Street Journal earlier this month that IBM had used AI to replace several hundred human resource employees. IBM's workforce ended up growing instead of shrinking, Krishna disclosed, because the company used the cost savings from the layoffs to hire more software engineers, marketers and salespeople.
Related: IBM Replaced Hundreds of HR Workers With AI, According to Its CEO
Salesforce's own technology could help other companies reduce their headcount. Salesforce CEO Marc Benioff said in September that the company's AI agents would allow its clients to forgo hiring new employees or gig workers in busier periods of time.
Earlier this week, Salesforce announced that it was acquiring cloud data management company Informatica for $8 billion to help advance its AI capabilities. The deal is one of Salesforce's largest since it bought Slack in 2021 for $27.7 billion and data firm Tableau in 2019 for $15.7 billion.
Salesforce reported first-quarter earnings on Wednesday that beat estimates, with revenue up 8% to $9.83 billion. The company stated that its AI subscriptions more than doubled in its first quarter and expects sales in the second quarter to be $10.11 billion to $10.16 billion, more than the $10.02 billion analysts anticipated.
"Sometimes you have a quarter when everything is going right for you," Salesforce CEO Marc Benioff said in an earnings call, per The Wall Street Journal.
Related: Can Anyone Beat Microsoft at AI? The CEO of Salesforce Thinks His Company Can.
Still, Salesforce shares were down about 4% on Thursday at the time of writing due to investor concerns about the still-early stage of its AI offerings and the deal risk with Informatica.
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