'Big Short' Investor Michael Burry Says Salesforce Stock Should Have Been Down: 'So Job Cuts Aren't the Reason to Own This'

"The Big Short" investor Michael Burry has expressed skepticism about how Salesforce Inc CRM's stock price will move following the company's plans to cut its workforce 10%.

“CRM should have gone down 25% as a result of these job cuts. So job cuts are not the reason to own this,” Burry tweeted.

Also read: Best Penny Stocks

Salesforce reportedly plans to close some offices to help manage costs and expects restructuring to result in charges of between $1.4 billion and $2.1 billion dollars.

The company's stock price closed up 3.57% on Wednesday following the announcement. While downsizing is negative news that hurts jobs and livelihoods, Wall Street often views these developments as positive for the balance sheet, which explains the rise in the stock price.

Burry's reference to what should have been the ideal direction of stock price movement reflects this irony.

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

"As our revenues accelerated during the pandemic, we hired too many people, which led to the economic downturn we are currently facing, and I take responsibility for that" , he said.

Salesforce stock has lost more than 38% in the past year due to consecutive quarters of slower growth, according to Reuters.

Read more: After Larry Summers, Rob Reich takes on House GOP's plan to cut IRS funding : "He's already trying to dump the ethics of Congress"

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.