U.S. activist investor firm Elliott Investment Management owns a multibillion-dollar stake in Salesforce, the business software company that owns the Slack messaging platform.
Elliott, which typically buys stakes in underperforming companies and seeks to change how they operate, said it looked forward to working “constructively” with the San Francisco-based company, but did not reveal any strategic recommendations.
“We look forward to working constructively with Salesforce to realize the value of a company commensurate with its stature,” Elliott managing partner Jesse Cohen told Reuters.
Cohen, 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,” adding that he “has [Salesforce’s co-chief executive] Marc Benioff and what he built”.
However, under founder and co-CEO Paul Singer, Elliott has a reputation for using aggressive tactics associated with aggressive companies. In 2021, British drugmaker GlaxoSmithKline (now known as GlaxoSmithKline) rejected Elliott’s attempt to get its chief executive, Emma Walmsley, to reapply for her job ahead of the company’s restructuring. That same year, Elliott accused British energy company SSE of having a “lacky” business plan.
In 2012, a dispute with Argentina over sovereign debt owned by Elliott led to the temporary seizure of an Argentine naval vessel in Ghana. Elliott has also acquired businesses and is the owner of the UK bookstore chain Waterstones.
Salesforce has been contacted for comment. Benioff co-founded the company and will become its sole boss after his chief executive, Brett Taylor, departs at the end of the month.
Benioff announced this month that Salesforce would cut 8,000 jobs, affecting about 10% of its workforce. In a letter to employees, he blamed himself for expanding the company too quickly during the coronavirus pandemic, when demand for tech products and services surged as millions of people around the world worked from home. Salesforce had nearly 80,000 employees as of October last year, up from 49,000 at the start of 2020.
“As our revenue accelerated during the pandemic, we hired too many people, causing the recession we now face, and I take responsibility for it,” Benioff wrote.
Alphabet, Google’s parent company, is the latest to announce layoffs in a series of layoff announcements by big U.S. tech companies in recent months, saying on Friday it would cut 12,000 jobs globally.
Elliott has made many technology-focused investments. It recently won a board seat at Pinterest, an online message board business, when it named Elliott portfolio manager Marc Steinberg as a director.
Salesforce is valued at $151bn (£122bn), but its shares have fallen 32% over the past year. The size of Elliott’s stake was not disclosed, although The Wall Street Journal, which first reported the move, described it as a “billion-dollar” investment.
Elliott’s investment marks the activist firm’s second stake in Salesforce in three months. In October, Starboard Value announced an undisclosed stake and said Salesforce was suffering a valuation discount due to “below-average growth and profitability.”
Starboard CEO Jeffrey Smith said at the time that his company has been engaging with management with new executives, including Taylor, who will be promoted to a Salesforce role in November 2021, more focused on balancing growth aspirations with profit delivery.
Elliott has been contacted for comment.