‘Ohana' Meets Austerity

Under pressure from shareholders, Salesforce cofounder Marc Benioff is cutting costs and curbing M&A for the first time-not to mention managing painful layoffs. Can he juggle tough times and a "we're family" culture?

- By Michal Lev-Ram

MARC BENIOFF, cofounder and CEO of Salesforce, has taken a lot of hits in recent months. First, activist investors went after him, attacking his expensive taste in acquisitions and agitating for greater efficiency at the enterprise software maker. Then, his employees lashed out: After about 8,000 of them were laid off in January, many of those who remained took to Slack-ironically, one of Benioff's expensive acquisitions to complain that the company's touchy-feely culture was just a facade.

"I'm willing to take the bullets and the cuts and the vilification," Benioff, 58, tells me during a wide-ranging interview that took place via phone while he was on a flight to the East Coast. "That's what you have to do as CEO, especially through difficult times."

Luckily for Benioff, at least the numbers have been kind: In early March, Salesforce released its most recent quarterly results, beating analyst estimates and setting better-than-expected projections for its next fiscal year. Revenue in the company's last quarter was up 14% year over year while adjusted margins (excluding things like $828 million in restructuring charges) rose to 29.2%, the highest in its 24-year history.