Salesforce to slash 10% of its workforce; staff to see minimum wage rises

Salesforce announces New Year job cuts

The New Year has not started well for workers at Salesforce – 10% of whom are set to become the latest casualties of the ‘tech layoff’ trend of recent months. In a statement issued this week, CEO Marc Benioff blamed the job losses on “over-hiring” during the pandemic. The notice affected staff have been given is likely to be very little, with the company also adding that it would cut its workforce “mostly over the coming weeks. Some offices will also close. In an email to staff reported by Yahoo! Finance, Benioff said: “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent.” He added: “We hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.” Rumors of job cuts began circulating before Christmas, after it was revealed that some Salesforce managers were being asked to identify their bottom 10% performing employees.

Musk seeks to reassure Tesla employees…

In his New Year message to staff at Tesla, CEO Elon Musk has said they needn’t be worried about the current stock market “craziness” that some commentators are saying is being caused by investors having jitters about low staff morale. The share price of Tesla has fallen by 70% in the last twelve months, which analysts are saying is being caused by a softening in demand for electric vehicles and Musk’s distraction with running Twitter. But in an email to staff, the ebullient billionaire said: “Don’t be too bothered by stock market craziness. As we demonstrate continued excellent performance, the market will recognize that.” He added: “Long-term, I believe very much that Tesla will be the most valuable company on Earth!” Analyst Morgan Stanley said it expects supply to exceed demand this year, and it has already been revealed that the automaker plans to run a reduced production schedule in January at its Shanghai plant. Last year the company sold a record 1.3 million cars. The 2022 figure topped the prior record of 936,000 in 2021 number fell short of CEO Elon Musk’s pledge to grow the company’s sales by 50% nearly every year.

…as NLRB hears staff are blocked from talking about working conditions

A complaint made to the National Labor Relations Board claims Tesla is violating US labor laws by directing employees not to talk about their pay or working conditions. The complaint reads that the electric carmaker “told employees not to complain to higher level managers about their pay or other conditions of employment” and said “not to discuss their pay with other persons.” The company is also alleged to have told staff not to discuss the hiring, suspension, or termination of employees with their peers. According to a report by the India Times, a judge will hear the arguments laid out by the complaint during a hearing in February. It’s not the first time the NLRB has dealt with Tesla. In 2021 it forced Musk to delete an anti-union tweet, and it also ruled that the firing of a union activist, Richard Ortiz, was illegal.

Employees set to enjoy minimum wage rises

Minimum wage workers will get a pay raise in 23 states from this week onwards, as laws previously passed take effect. The increases range from an extra 23 cents per hour in Michigan to an additional $1.50 in Nebraska, where a ballot measure approved in November will raise the minimum wage from $8 to $9.50 an hour. However, the gap continues to grow between the 20 states that follow the federal minimum wage of $7.25 an hour and the 30 others that pay more. The highest state minimum wage now will be $15.74 an hour in Washington. This is more than double the federal rate. Alabama, Louisiana, Mississippi, South Carolina and Tennessee are five Southern states have not established state-level minimum wage policies, effectively defaulting to the national federal minimum of $7.25. Employers in these states must adhere to that federal benchmark and do not have the freedom to pay employees whatever they want.

Recession could ‘end’ working from home

With the IMF warning that a third of the global economy will be in recession in 2023, commentators are discussing whether this might finally see a reversal in power from employees back to employers – many of whom will now demand that staff work from their offices. According to a report in Bloomberg, if the job market in the US weakens, companies might rethink letting employees work remotely. Already New York state government data shows that the return of white-collar workers to office had reached about 67% of its pre-pandemic level. “It’s not going to be so easy to give up your job [in 2023],” said Kathryn Wylde, chief executive of the Partnership for New York City, to Reuters. “This will probably mean that people are less resistant to the requirement they are back in the office at least three days a week, which is where it feels like it is headed.” However, the same Bloomberg report also found remote work would not disappear altogether as it is essential for retention. A study published by researchers at Stanford University, the University of Chicago and the Instituto Tecnológico Autónomo de México found hybrid work not only boosted satisfaction and productivity but also reduced attrition by 35%.

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Small business wage growth at its lowest in nearly a year

Data by payroll data firm, Paychex, has confirmed that overall average hourly wages for US staff in small businesses rose by just 4.95% year-over-year in December. This is the lowest rate since March 2022. Florida saw the highest hourly earnings growth – at 6.44%; and this was followed by Missouri and Texas, where both saw wage growth above 6%. The data also revealed that the leisure and hospitality sectors continue to rank first among sectors in hourly earnings growth (6.75%). Leisure and hospitality was the only sector to report an increase in hourly earnings growth from November to December. Miami topped metros in both hourly earnings growth (6.61%) as well as weekly earnings growth (6.27%). Meanwhile San Francisco and Washington were recorded as having the highest hourly rates among metros, at $39.45/hour and $38.73/hour respectively. Weekly earnings growth in Detroit slowed to 3.09%, the weakest among metros. Commenting on the figures, James Diffley, chief regional economist at IHS Markit said: “The Paychex/IHS Markit Small Business Jobs Index flattened in December, following nine months of moderation. Additionally, small business hourly wage growth is starting to slow as the Fed takes measures to fight inflation.”

Employers will soon have to accommodate pregnant workers

The newly approved Pregnant Workers Fairness Act (PWFA) – an amendment added to the $1.7 trillion government funding bill that cleared both chambers last week – will soon require employers to make “reasonable accommodations” to staff who are pregnant. The law, which comes into effect in June, requires all employers with 15 or more workers to provide special arrangements, for everyone from job applicants to employees with conditions related to pregnancy or childbirth. Reasonable accommodations could include assigning light duty that doesn’t involve heavy lifting, or allowing more frequent bathroom breaks. The PWFA also prohibits employers from discriminating against a job candidate or employee because of their need for a pregnancy-related accommodation. The PWFA will be enforced by the US Equal Employment Opportunity Commission and the US Attorney General’s Office as it pertains to private sector employees. The legislation also directs the commission to issue guidance in the next two years giving examples of what “reasonable accommodations” are for pregnant workers.

 

Peter Crush is the interim editor of TLNT. He’s an award-winning journalist based in London, and he writes exclusively about the ever-changing world of work.

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