Salesforce (CRM:NYE), the cloud-based software company, recently announced a round of layoffs that will affect 12% of its workforce. This action is part of the company’s cost-control initiatives and is expected to help it improve its bottom line. The layoffs come after the company reported lower-than-expected revenues in its most recent quarter.
On the other hand, Amazon (AMZN:NSD) has also announced layoffs. The e-commerce giant announced that it will be laying off 1% of its global workforce, which is the equivalent of 3,500 jobs. This move is also part of Amazon’s cost-cutting initiatives and is expected to help the company increase its margins.
Both companies have seen investor interest increase after the layoff announcement. Investors are betting that the companies will be able to reduce their costs and improve their margins in the future. This could be a sign of better times ahead for these companies, as they look to weather the economic downturn.
Although the layoffs are not ideal, they can be seen as a cost-saving measure that is necessary for the current economic climate. Both CRM and AMZN are taking proactive steps to ensure that they remain competitive and profitable. This could be a sign of better things to come for both companies in the long run.
Salesforce.com Inc. (CRM:NYE):
Salesforce (CRM:NYE) was one of the pandemic outperformers, but its stock has now returned to its pre–pandemic levels. The company has announced a restructuring plan involving 8,000 job cuts in order to reduce costs and boost margins.
Salesforce expects to incur costs of $1.4 – $2.1 billion related to the cost–cutting measures, but there is no outlook for long–term cost savings. Revenue growth has slowed to 14% in Q3 and is expected to decrease further in its upcoming Q4 results.
Analysts have given the stock a Strong Buy rating, with an average Salesforce stock price target of $200.69, implying 31.2% upside potential.
Amazon.com Inc. (AMZN:NSD):
Amazon (AMZN:NSD) endured a difficult 2022, in which it lost over $1 trillion in valuation, leading to its announcement of a record 18,000 job cuts. This was due to the subsiding of an abnormal demand surge caused by the pandemic, together with rising interest rates, inflation, and subsequent consumer spending cuts.
Despite this, the Wall Street community remains optimistic about AMZN stock, with 36 Buys and three Holds, with an average price target implying 53% upside potential from current levels. Analysts are confident that Amazon‘s key growth engine, AWS, will continue to drive the company‘s success and help it recover from its losses.
In Conclusion:
Amazon is expected to benefit from the growth in its e–commerce offerings, while Salesforce is likely to take advantage of the increasing demand for cloud computing services.
Despite the near–term challenges, both companies have significant potential for long–term growth, as they have strong fundamentals and increasing demand for their services.
Furthermore, Amazon and Salesforce have a sizable market share in their respective industries and have a track record of being innovative and resilient. For these reasons, both companies are well–positioned to remain successful in the long term.
