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US activist investment firm Elliott Investment Management has acquired a multi-billion dollar stake in Salesforce, the business software company that owns the Slack messaging platform.
Elliott, who typically buys stakes in underperforming companies and seeks changes in how they operate, looks forward to working “constructively” with San Francisco-based companies without revealing any strategic proposals. He said that
“We look forward to working constructively with Salesforce to deliver the company’s value to its position,” Jesse Cohn, Elliott’s managing partner, told Reuters.
Cohn, who has served on the boards of several technology companies, including Twitter and eBay, called Salesforce “one of the preeminent software companies in the world,” [Salesforce’s co-chief executive] Marc Benioff and what he built.”
However, Elliott has been known to wield aggressive tactics associated with activist companies under the leadership of founder and co-CEO Paul Singer. In 2021, British pharmaceutical company GlaxoSmithKline, now known as GSK, made an attempt by Elliott to get CEO Emma Walmsley to reapply for her job before the company was restructured. That same year, Elliott accused British energy company SSE of having a “lackluster” business plan.
In 2012, a dispute with Argentina over sovereign debt owned by Elliott led to the temporary seizure of Argentine naval vessels in Ghana. Elliott has also made corporate acquisitions and is the owner of the British bookstore chain Waterstones.
We’ve reached out to Salesforce for comment. Benioff will co-found the company and become sole boss when his fellow CEO Brett Taylor steps down later this month.
Benioff announced this month that Salesforce is making 8,000 roles redundant, impacting about 10% of its workforce. In a message to staff, he said that with millions of people around the world working from home, demand for technology products and services surges, making the company too vulnerable during the coronavirus pandemic. I blamed myself for expanding so quickly. Salesforce employs about 80,000 people as of last October, compared to 49,000 in early 2020.
“We hired too many people because the pandemic boosted our revenues, leading to this recession we’re facing now. I take responsibility for that,” Benioff said.
The US tech giant has made a series of layoff announcements with Google owner Alphabet in recent months, revealing its latest job cut plans, cutting 12,000 jobs worldwide on Friday. said to
Elliott has made many investments focused on technology. The company recently won a seat on the Pinterest board of directors when it added Elliott’s portfolio manager Mark Steinberg to its board of directors.
Salesforce is valued at $151 billion (£122 billion), but its stock has fallen 32% over the past year. The size of the stake Elliott acquired was not disclosed, but the Wall Street Journal said: who first reported the movedescribed it as a “billion dollar” investment.
Elliott’s investment is the second activist company to invest in Salesforce in three months. In October, Starboard Value announced a private equity stake, saying Salesforce was struggling with valuation discounts because it “imbalanced growth and profitability.”
Starboard CEO Jeffrey Smith said at the time that his company was involved with management, and new executives, including Taylor, who was promoted to a Salesforce role in November 2021, were driven by growth ambitions. He said he was more focused on balancing the realization of profits and profit.
Elliott has been reached for comment.