- Salesforce CEO Marc Benioff recently told analysts that the company won’t be affected by the ongoing coronavirus outbreak because it’s built to withstand recessions and crises like this one.
- Salesforce is now also urging many of its employees in areas affected by coronavirus to work from home and is suspending non-essential travel for its roughly 50,000 employees around the world in order to be safe.
- Despite Benioff’s reassurances, the company is aware it might be affected by the coronavirus in the long term.
- In its latest annual filing, Salesforce outlined four ways in which the company might be adversely impacted by coronavirus in the long term.
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Salesforce CEO Marc Benioff said on the company’s latest call with analysts that the company won’t be affected by the ongoing coronavirus outbreak. He said the company he built with co-founder Parker Harris was built to withstand recessions and crises like this one.
Since then, the situation has increased in severity, with many new cases being reported in the US. This has prompted Salesforce to encourage its employees in the Seattle area, the San Francisco Bay Area and New York City to work from home through the end of March. The company will also continue to pay its hourly workers who might see a reduction in work due to the coronavirus outbreak.
Even before then, Salesforce had already suspended non-essential travel for its roughly 50,000 employees around the world and enhancing “office protocols” in order to be safe.
When Benioff addressed the impact of coronavirus on the company, he said that, if bookings are slightly up or down between quarters, the company has enough reserves and a strong enough business model to withstand it.
“93% of our revenue is deferred, so that just gives us tremendous visibility into the future,” he said, describing the company’s model of subscription software as a “key architecture of our accounting” that illustrates “our deep contractual multi-year relationships with our customers,” Benioff recently told analysts.
Nonetheless, the company is preparing to possibly see some impact on its business due to the outbreak. While these are all speculative scenarios, Salesforce mentioned several potential effects from coronavirus, including those they can’t yet predict, in its most recent 10-K report.
Here are the four ways in which Salesforce thinks it might be hurt by coronavirus in the long term:
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