Elliott pushed margins; Salesforce cut 10% of staff and doubled buybacks

Starboard Value disclosed a Salesforce stake in October 2022 with calls for higher margins; in January 2023 Elliott Management built a multibillion-dollar position as the company's stock had lost about $170 billion of market value from its 2021 peak.

On January 4, 2023, Salesforce announced a restructuring plan to cut about 10 percent of its workforce, exit selected real estate and take $1.4-2.1 billion of charges. CEO Marc Benioff said the company had hired too many people heading into the downturn.

On March 1, 2023, Salesforce reported FY23 revenue of $31.4 billion and a 22.5 percent non-GAAP operating margin, guided FY24 to about 27 percent, and raised its share repurchase authorization to $20 billion from $10 billion.

Salesforce guided FY24 non-GAAP operating margin to about 27 percent versus 22.5 percent in FY23 and raised its repurchase authorization from $10 billion to $20 billion.

Two activists turned margin into a public benchmark before the board could set its own pace.

The layoffs and real-estate exits attacked the cost base that hiring during the boom had built.

Raising the buyback to $20 billion converted the margin plan into direct per-share value.

A growth company can absorb activist pressure by making margin a public target: cost cuts plus a real buyback give shareholders a measurable reason to re-rate the stock.

The March 2023 guidance set a new profit template: around 27 percent non-GAAP operating margin for FY24 with $20 billion authorized for buybacks. Salesforce held to that discipline while continuing to invest in its core CRM and data businesses.