US activist investment firm Elliott Investment Management has taken a multi-billion dollar stake in Salesforce, the enterprise software company that owns the Slack messaging platform.
Elliott, which typically buys stakes in underperforming companies and seeks to change the way they are managed, said he was eager to work “constructively” with the San Francisco-based company, without revealing any strategic proposals.
“We look forward to working constructively with Salesforce to realize the value that is appropriate for a company of its size,” Jesse Cohn, managing partner at Elliott, told Reuters.
Cohn, who has served on the boards of several tech companies including Twitter and eBay, called Salesforce “one of the world’s leading software companies,” adding that he had “developed a deep respect for [Salesforce’s co-chief executive] Marc Benioff and what he built”.
However, Elliott, under founder and co-CEO Paul Singer, is known for wielding the aggressive tactics associated with militant businesses. In 2021, British drugmaker GlaxoSmithKline, now known as GSK, resisted Elliott’s attempts compel its chief executive, Emma Walmsley, to apply for her position before the company was restructured. In the same year, Elliott accused British energy company SSE to have a “dull” business plan.
In 2012, a dispute with Argentina over sovereign debt held by Elliott led to the temporary seizure of an Argentine navy vessel in Ghana. Elliott also buys businesses and owns the UK bookstore chain Waterstones.
Salesforce has been contacted for comment. Benioff co-founded the company and will be sole boss when fellow chief executive Bret Taylor leaves at the end of this month.
Benioff announced this month that Salesforce would cut 8,000 positions, affecting about 10% of its workforce. In a message to staff, he blamed himself for growing the business too quickly during the coronavirus pandemic, amid soaring demand for tech products and services as millions of people worked from home around the world. entire. Salesforce employs nearly 80,000 people last October, up from 49,000 at the start of 2020.
“As our revenues have accelerated during the pandemic, we have hired too many people leading to this economic downturn we are currently facing, and I take responsibility for that,” Benioff wrote.
Big US tech companies have made a series of layoff announcements in recent months with Google owner Alphabet the latest to reveal plans to cut jobs, saying on Friday it would would reduce its global workforce by 12,000.
Elliott has made many technology-focused investments. He recently won a seat on the board of Pinterest, the online bulletin board company, when the company added Elliott portfolio manager Marc Steinberg as a director.
Salesforce is valued at $151bn (£122bn), but its share price has fallen 32% in the past year. The size of the stake taken by Elliott was not disclosed although the Wall Street Journal, who first reported the movedescribed it as a “multi-billion dollar” investment.
Elliott’s investment marks the second time in three months that an activist company has taken a stake in Salesforce. In October, Starboard Value announced an undisclosed stake and said Salesforce was suffering a valuation discount due to an “inferior mix of growth and profitability.”
Starboard chief executive Jeffrey Smith said at the time that his company had engaged with management and that new leaders, including Taylor who was promoted to Salesforce in November 2021, were better focused on the balance between growth aspirations and the realization of profits.
Elliott was approached for comment.