The company started the year with a lot of turmoil
this year he did it It didn't start well for Salesforce, with an unusual level of turbulence and uncertainty surrounding the company. But as the year comes to a close, Salesforce is in surprisingly good financial shape: Its stock is up more than 96% so far this year. Earlier this year, such an outcome would have seemed impossible to imagine.
The bad news started coming even before the new year began, when co-CEO Bret Taylor, who many speculated was being groomed to be Marc Benioff's heir apparent, suddenly announced he would be leaving the company at the end of November. . A week later, Slack CEO and co-founder Stewart Butterfield announced that he, too, would be resigning. Losing two key executives in less than a week would be a big blow for any company, but it would be just the beginning of an avalanche of bad news for the CRM giant.
Going into the year, we learned that activist investors were, well, quite active within the company. This included Elliott Management, Starboard Value, ValueAct Capital, Inclusive Capital and Third Point. When activists show up, they usually have a strong opinion on how to “fix” a company, and this would be no different.
First, we learned that Salesforce was bringing on three new board members, which seemed like a way to appease activists, especially since one of them was Mason Morfit, CEO and chief investment officer of ValueAct, one of those same activists.
Activists often pressure the company to cut costs, and in corporate terms, that usually means cutting staff. Sure enough, Salesforce soon announced that it would cut 10% of its workforce, or 7,000 people, on January 4, 2023. The excuse was that it had overhired during the pandemic and this was a correction, but it could also have been throwing its weight behind. towel. activists a bone to cut costs.
Either way, reports suggested the company didn't handle layoffs well, engineers were being pushed, and Benioff began preaching about returning to the office after accepting work from home and what Salesforce called the “Digital headquarters”, during the pandemic. The company's reputation as a progressive, employee-friendly organization took a great success.
