Software companies are facing pressures to invest in artificial intelligence while maintaining profitability, prompting a shift in hiring strategies toward lower-cost areas outside the U.S. Companies like Salesforce and Workday are cutting jobs domestically while increasing international hires. Salesforce's COO noted that countries like India and Mexico City could provide high-quality labor at lower costs. With the rise of generative AI necessitating additional investment, firms must balance this alongside recent pressures to focus on profit margins rather than just revenue growth, leading to significant workforce adjustments.
Do we need to hire everybody in San Francisco? Or can we think about other locations that are cheaper where we can get really incredible labor like India and Mexico City.
The emergence of generative AI has complicated the picture - software vendors must balance investing in expensive new capabilities without hurting their profitability.
Last year, Chief Executive Officer Carl Eschenbach emphasized a new focus on expanding margins, saying hiring more in countries like Costa Rica would help in this effort.
Since late 2022, tech companies have been under pressure from investors to focus on margins after years of prioritizing revenue growth.
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