ServiceNow CFO: Talent is 'what’s really going to accelerate growth'
ServiceNow CFO Gina Mastantuono joins Yahoo Finance's Julie Hyman and Brian Sozzi at the World Economic Forum in Davos, Switzerland, to discuss the focus on digital transformation, hiring in a tight labor pool, and other challenges businesses are facing right now.
RACHELLE AKUFFO: The tech layoff story dominated the end of 2022. And of course, it's bleeding into this year, with Amazon's cuts beginning and Microsoft's announcement yesterday that it's slashing 10,000 jobs.
Well, the presence of big tech certainly being felt in Davos, with the likes of Meta, IBM, and Zoom all visible in the Swiss town's main promenade. Yahoo Finance's Julie Hyman and Brian Sozzi spoke with another leading tech name, cloud computing giant ServiceNow. The Group's CFO struck a cautiously optimistic note on the road ahead for the sector.
GINA MASTANTUONO: What we we're seeing from a technology perspective is that the technology strategy continues to be the business strategy. And what that means is they're talking about IT spending at about triple the amount of GDP and software spending almost double that.
And so I've been meeting with tons of customers while I've been here. And digital transformation remains top of mind for everyone. And what they're looking for is they're looking for platforms that are able to simplify the complexity, are easy to use, and are quick time to value. And luckily, ServiceNow ticks all of those boxes.
So really excited about what we're seeing in the market, although certainly elongated deal cycles and more scrutiny around deals in this economy continues to be commonplace.
BRIAN SOZZI: Gina, I have long looked at the CFO, especially the past few years, as the chief transformation officer. You wear-- that position wears a lot of hats. As you look at your day-to-day, what's your biggest challenge you're up against?
GINA MASTANTUONO: Well, you're absolutely right. I think the role of the CFO, over the last three years, has really evolved to very much a strategic business partner to the entire business. And why that is because we have a bird's eye view across the enterprise.
And so I spend as much time with my finance organization as I do with my CHRO, for example, because talent is so incredibly important as I think about growth for the mid and long term. I spend so much time with my CIO as well because the technology strategy is the business strategy.
And so those cross-functional relationships are more important than ever. And so you're absolutely right. The role is definitely evolving. And spending a lot more time with the business, with customers, and really understanding what are going to be the levers for growth in the short, mid, and long term--
BRIAN SOZZI: ServiceNow has been very aggressive, or staying very aggressive on the hiring front. We're always hearing that from your CEO Bill McDermott on we're hiring, we're hiring, we're hiring. How do you balance that against what investors want right now, more of a focus on the bottom line?
GINA MASTANTUONO: Well, you're exactly right. Investor sentiment has definitely shifted from a growth at all costs to a balance of growth and profitability. But ServiceNow has been really disciplined in both for years now.
And so it positions us really well. We have best-in-class margins as well as best-in-class growth. So while we are not in a position to have to do layoffs, we certainly have slowed down hiring a bit during the back half of the year, which positions us well to not have to do any layoffs, but continuing to grow.
We are absolutely hiring, with a priority on sales and engineering talent. And you'll continue to see us do that because talent is what's going to really accelerate growth.
JULIE HYMAN: Is it easier to find talent right now? In other words, are you snapping up some of the folks who are maybe getting laid off from some of your competitors?
GINA MASTANTUONO: We absolutely are. The market right now is interesting, for sure. And the ability to snap up some great talent is better today than certainly the last year. So we're taking advantage of that, for sure.
BRIAN SOZZI: Take us through, by market, what would you say is your strongest market right now? And why do you think that's the case?
GINA MASTANTUONO: IT remains extremely strong. As you can imagine, resiliency, security, IT operations, having to do more with less, and again, the technology strategy being the business strategy, we're seeing IT workflows holding up extremely strong. But also employee workflows, employee engagement more important than ever postpandemic. So our employee workflow is doing very well.
Customer workflows-- everyone is focused on the customer more now than ever. It's one of our largest addressable markets. And so we continue to see really good growth across the portfolio.
JULIE HYMAN: You said earlier in one of your answers that you're hearing sort of cautious optimism here on the economy. It's interesting because it sort of depends on who you talk to, right? Some people are saying, oh, yes, we're going into a recession. But overall, it does seem to be a little bit less dire maybe. What are you hearing on the ground? What's the vibe like around that you're feeling?
GINA MASTANTUONO: Yes, and interesting. I was talking to economists from Europe, from the US as well as Asia, and interesting because very rarely do they agree. But the tone has been much less pessimistic than I anticipated. And certainly, while recession is likely in many economies, the thought about soft landing and not as deep, the fundamentals are much stronger.
Banks are in stronger positions. Consumers have stronger savings than they did 10 years ago. So the fundamentals seem stronger, such that, if a recession does occur, the likelihood of a soft landing seems more credible today than what I've been hearing kind of three, four months ago.
RACHELLE AKUFFO: ServiceNow CFO there on the road ahead for tech in Davos with Brian Sozzi and our Julie Hyman.