Earlier this year, Twitter cut its contract with Salesforce by 75%, from $20 million to $5 million, after cutting its workforce by roughly the same percentage.
Several key enterprise software customers have cut their workforces in the past year, highlighting a huge pain point for enterprise software providers.
Despite its efforts to implement new engineer productivity metrics, the CRM giant has lost revenue at such a high-profile customer in the face of activist investors’ demands.
Ryan Neu, CEO and Co-Founder of Vendr, told The Register that often, businesses are forced to make suboptimal decisions due to the headache of contracts and multi-year deals, such as laying off workers or reducing other aspects of their business. He further added that they are encouraging the suppliers to contract and expand as per the need of enterprises for the given reason.
In the meantime, big companies like Target are removing lower-level managers from the decision-making process about software procurement.
As a result, products such as Zoom, the videoconferencing service owned by Salesforce, and Slack, the work-chat app, are being pushed to their limits. Zoom and Slack compete against larger bundles by Microsoft and Google, offering similar features.
Also, Business Insider has claimed that there might be another round of layoffs in Salesforce, leading to a 10% percent hit to the company.