Elliott takes multi-billion dollar activist stake in Salesforce

Elliott Management has built a multi-billion dollar position in Salesforce as another big activist investor joins the shareholder list of a software group facing calls to cut costs and improve its stock price.

The New York-based company joins fellow activist Starboard Value, which disclosed a stake in Salesforce in October with a call to boost profit margins. It was unclear what Elliott’s position on the company was and whether she had made any recommendations to the board.

The activist stakes will mount the pressure on Salesforce and its co-CEO and co-founder Marc Benioff. The company has lost about $170 billion in market value since peaking in late 2021 amid a downturn in the tech sector following a pandemic-driven boom.

“Salesforce is one of the world’s leading software companies, and after following the company for nearly two decades, we have developed a deep respect for Marc Benioff and what he has built,” said Jesse Cohn, managing partner at Elliott. in a report. “We look forward to working constructively with Salesforce to realize the value worthy of a company of this magnitude.”

Salesforce declined to comment. Elliott’s involvement was first reported by The Wall Street Journal.

Earlier this month, Salesforce announced it would cut about 10% of its workforce as part of a reversal of a pandemic hiring spree. The company added nearly 17,000 employees in 2021. The group is one of several Big Tech companies, including Alphabet, Amazon, Microsoft and Meta, to have announced sweeping job cuts in recent weeks in a context of slowing growth across the industry.

“We have hired too many people leading to this economic downturn we are currently facing, and I take responsibility for that,” Benioff wrote in a letter to staff at the time. The company said it expected to incur $1.4 billion to $2.1 billion in layoff and restructuring charges.

The San Francisco-based enterprise software group has also seen several high-profile departures from its executive ranks. Co-chief executive Bret Taylor announced in November that he would step down this month. Stewart Butterfield, the managing director of work tool Slack, which Salesforce acquired in July 2021, also confirmed last month that he would be leaving.

Elliott is one of Wall Street’s best-known activists with a reputation for attacking tech companies. Under Cohn’s watch, the company became one of the largest and most active software investors in the world.

Last year, Elliott helped arrange buyouts of enterprise software specialist Citrix Systems and media ratings group Nielsen, two of the year’s largest leveraged buyouts, through its capital unit. -Evergreen Coast Capital investment.

Elliott has the flexibility to build large activist public holdings as well as help arrange and participate in large private equity transactions. Along with buyout firm Francisco Partners, she acquired non-core assets from Dell Technologies in 2016. Elliott has also worked with a number of large private equity firms to mount LBOs.

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