'Big Short' Investor Michael Burry Says Salesforce Stock Should've Been Down: 'Job Cuts Are So Not The Reason To Own That'

"The Big Short" investor Michael Burry has expressed skepticism on the stock price movement of Salesforce Inc (NYSE: CRM) following the company’s plans to reduce its current workforce by 10%.

“CRM should have been down 25% on those job cuts. Job cuts are so not the reason to own that,” Burry tweeted.

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Salesforce reportedly plans to close down select offices in order to help manage costs and expects the restructuring to lead to charges between $1.4 billion and $2.1 billion.

The company’s stock price closed 3.57% higher on Wednesday in the wake of the announcement. Although workforce reduction is negative news that hurts employment and livelihood, Wall Street often considers such developments as a positive for the balance sheet, which explains the rise in stock price.

Burry’s reference to what should have been the ideal direction of the stock price movement is a reflection of this irony.

Management Statement: "The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Salesforce co-Chief Executive Officer Marc Benioff said in a letter to employees, according to Reuters.

"As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we're now facing, and I take responsibility for that," he said.

Salesforce stock has lost over 38% in last one year owing to consecutive quarters of slowing growth, according to Reuters.

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