Shortly after assuming control of Twitter at the end of 2017, Elon Musk initiated a series of significant changes, including the elimination of dozens of positions and the closure of several offices.
Marc Benioff, CEO of Salesforce, is among the many CEOs and investors in the technology sector keeping a close eye on developments.
Every Silicon Valley CEO must wonder if they have “an Elon Musk inside of them” after seeing what Elon Musk has accomplished. During a Thursday interview with Insider, Benioff made the declaration.
“If you are any kind of executive in the organisation, that is an existential dilemma,” Benioff said. I know what you’re thinking: “Wow, that’s a very unorthodox management approach.” Nevertheless, as I’ve mentioned before, you can’t discount his accomplishments.
For its part, Salesforce has begun a cost-cutting initiative as activist investors eye the business. Salesforce is laying off 10% of its workers and, according to a leaked version of the company’s business plan obtained by Insider, plans to increase profit margins to more than 30% by limiting the expansion of its workforce, slashing G&A costs, marketing expenditures, and real estate.
In the proposed plan, Salesforce tells its employees to “run lean and mean,” “spend like it’s yours,” and “don’t let considerations like company culture get in the way,” all while condemning roadblocks like policies that favour culture over efficiency and “using culture as an excuse” for not implementing changes.
On Wednesday, Salesforce announced solid quarterly earnings, a massive new share buyback, and a pause in the company’s large acquisition strategy. Benioff’s new efficiency push is paying off, as seen by the report.
To intervene was necessary, and I had no other option.
According to Benioff, he became more involved in the day-to-day operations of Salesforce after co-CEO Bret Taylor quit in late November.
“I have to step in and supervise the company’s performance,” Benioff told Insider. And that’s the end consequence, as you can see from the data before you right now.
Even after months of negotiations, Benioff has failed to appease Elliott Management, one of the activist investors that has amassed a sizable position in Salesforce. On Wednesday, Elliott stated that a “sustainable leadership strategy” was required for the organisation.
Although Benioff has been at the helm of Salesforce since its inception in 1999, he has spent the most of that time focusing on expansion, leading some insiders to worry that he isn’t up to the challenge of reducing expenses.
Benioff, in his Insider interview, remarked that he has been through comparable difficult situations, highlighting the adaptations Salesforce had to make during the Great Recession of 2008 and 2009.
Some modifications are necessary now, he said. “It doesn’t mean, however, that we have to abandon our unique way of life in favour of a more conventional business model. Although business is business, it also has the potential to be the most powerful vehicle for social change.”