Salesforce Guts Tableau After Spending $15.7 Billion in 2019 Deal

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

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Chief Executive Officer Mark Nelson 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 fueled 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 pummeled 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.

Insider earlier reported that Mulesoft employees were widely affected by Wednesday’s cuts. About a year ago, Bloomberg reported that Salesforce was struggling with a slowdown in sales growth and executive departures at Mulesoft, which helps customers connect their software across the internet. The exodus of key employees raised concerns the unit wouldn’t produce the gains expected by San Francisco-based Salesforce, the top seller of customer relations management software.

Still, it seems that Salesforce executives are less excited about Tableau than its other new divisions. Corporate event transcripts compiled by Bloomberg show that Tableau receives far fewer mentions than Slack or Mulesoft when adjusting for length of time they’ve been with the company.

The shuffling at the division accelerated after Adam Selipsky, who was Tableau CEO at the time of the deal, left in 2021 to run Amazon.com Inc.’s Amazon Web Services cloud-computing unit, according to two people familiar with the matter. While Selipsky reported to Taylor, the Salesforce co-CEO, his successor at Tableau, Nelson, lost that access. Nelson reported to Chief Product Officer David Schmaier, before being moved under Executive Vice President Syam Nair.

Nelson was pushed out of the company entirely in late December, and other Tableau executives had been forced out in the preceding months. On Wednesday, Tableau’s longtime philanthropy chief and other senior staff were let go.

Most of the executives listed on Tableau’s leadership site when the acquisition was announced have since left the company. The Tableau leadership web page ceased to exist in mid-2022, according to the Internet Archive’s Wayback Machine. Today, the URL redirects to the page for Salesforce leadership, showing Benioff atop the company.