Salesforce is losing the key execs behind some of its biggest and most expensive bets at a critical moment
- Salesforce is losing a number of key execs in the wake of Bret Taylor's departure.
- Slack CEO Stewart Butterfield is also departing, along with some other product-focused execs.
Salesforce is in the midst of a serious brain drain at the highest levels. Last week, co-CEO Bret Taylor made the surprise announcement that he'd be departing the company.
Shortly afterwards came the news that Mark Nelson, the CEO of Salesforce subsidiary Tableau, and Steven Tamm, a CTO at the cloud tech giant, are also departing. In November, the company also said Gavin Patterson, the company's chief strategy officer who had previously been its chief revenue officer will depart at the end of January.
Then, earlier this week, Insider reported that Stewart Butterfield, CEO of Slack — the workplace chat app that Salesforce acquired in 2021 for $27.7 billion —will be leaving the company in the new year. Tamar Yehoshua, Slack's chief product officer, is also resigning, as is Slack senior VP of communications Jonathan Prince.
It's not clear if the timing of all these departures is anything more than coincidence: In a memo to employees, Butterfield wrote that his plans to depart have nothing to do with Taylor's, as Insider earlier reported.
Still, it comes at a critical moment for Salesforce and its now-sole CEO Marc Benioff. The company's stock is down some 48% from the beginning of the year, as the larger tech downturn takes its toll on the markets. Salesforce has warned investors that a slowing economy is making it more difficult to close deals as IT spending stalls out, even as investors push Benioff to demonstrate a commitment to improving its profit margins.
And the specific executives who are hitting the exits represent some of Salesforce's biggest bets on the future. Taylor himself was seen as a product visionary who would help Salesforce break into new markets, as seen when he masterminded the Slack acquisition. Indeed, Slack and Tableau represented Salesforce's two largest acquisitions in its history, as it invested in new lines of business.
The departing execs championed Salesforce's product strategy
The departures of Taylor, Butterfield, and Nelson come as Salesforce's strategy comes under the microscope on Wall Street.
With Slack and Tableau, Salesforce already had a lot to prove. Wall Street thought that the $27.7 billion it paid for Slack and the $15 billion for Tableau was far too steep given the company's financial situation. The scrutiny hasn't stopped.
"Growth has been slowing for years," Bernstein analysts wrote in a recent note to clients. "But that has not been readily apparent due to the cadence of large acquisitions which generate a multiyear tailwind to growth due to acquisition accounting."
Taylor, who had been COO of Salesforce before becoming co-CEO in 2021, championed the two as key to a strategy of building the company's platform into an all-in-one tool for sales, to service, to marketing and commerce, to data analysis. Slack would be the "digital HQ" where work gets done, while Tableau helps customers crunch the massive amounts of data stored in the Salesforce platform and turn it into useful insights.
Neither Slack nor Tableau is going anywhere. Salesforce has already said that Lidiane Jones, an executive VP, will take over for Butterfield as Slack CEO. She'll be working with Cal Henderson, Slack's CTO and cofounder, who remains in his role. And Salesforce has said that in the wake of Nelson's departure, Tableau will be rolled more closely into Salesforce's engineering organization.
What it does mean, however, is that Salesforce, Slack, and Tableau are all losing the biggest champions of the integrated product strategy right as the company faces hard questions.
Amid the chaos, however, some on Wall Street thinks there may be an opportunity.
While some of Salesforce's most experienced execs remain on Benioff's leadership team, including CFO Amy Weaver and COO Brian Millham, analysts think Benioff needs to recruit new leadership.
Now could be a good time to recruit talent from a smaller rival or startup, Jaluria told Insider. The relative stability of Salesforce compared to a smaller startup during an uncertain economic environment would be a major draw.
"You need leadership that's focused on the next chapter of Salesforce and the way things should be done, not necessarily the way things have been done from the get go," RBC analyst Rishi Jaluria said last week at the time of Taylor's announcement.
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