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No rest for Salesforce as activist investor Elliott Management takes a billion-dollar stake in the company • TechCrunch

It’s been a tumultuous time at Salesforce lately, and things aren’t going to calm down anytime soon. The Wall Street Journal signed up last night that the company is now dealing with activist investors Elliot Management.

Elliott confirmed that it has taken a multibillion-dollar stake in Salesforce and shared this comment from Jesse Cohn, managing partner at the company:

“Salesforce is one of the leading software companies in the world, and following the company for nearly two decades, we have developed a deep respect for Marc Benioff and what he has built. We look forward to working constructively with Salesforce to realize the value befitting a company of its size,” he said in a statement.

You can take what you want from that, but Elliott typically takes an interest in a company to make changes to the way the company operates with the goal of cutting costs and increasing shareholder value. In some cases, it tries to push through CEO changes or even sell the company, although that seems less likely in this case.

Elliott is not the only activist investor, however. Starboard Value also took what was described as a significant stake in October, stating it wanted more operational discipline from the company. Elliott turns up the pressure. It’s not clear how having two activists in the game at the same time will play out, or whether the strategies of the two firms will align. Either way, Marc Benioff, CEO of Salesforce, could be busy fending off challenges to the way he runs his company.

Companies like Elliott and Starboard are usually looking to tighten their belts, something that Salesforce itself has undertaken. CFO Amy Weaver outlined a goal of more efficient operating margins of 25% in FY2026, per CNBC. One step the company has already taken is to lay off 10% of its employees at the beginning of the month. It’s possible that these companies are demanding deeper cuts, adding to the uncertainty that already exists at the company.

It’s been a tough time for the CRM leader with a lot of bad news. Prior to the layoffs, it announced that key executives, including co-CEO Bret Taylor, would leave the company at the end of this month. Shortly thereafter, Stewart Butterfield, co-founder and CEO of Slack, the company that acquired Salesforce for $28 billion at the end of 2020, announced that he would also step down.

The company reported sales of more than $7.8 billion, up 14% and up 19% in constant currency after factoring in the strong dollar for overseas earnings. Still, that was down from last year’s 27% growth, but at a time when all software companies are struggling in an uncertain economic environment.

TechCrunch asked for comment from Salesforce, but needed to hear back before publishing. If that changes, we’ll update the article.

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