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Box CEO talks COVID-19, activist investors, and parenting

May 13, 2020, 2:00 PM UTC

Like many executives during the coronavirus pandemic, Box CEO Aaron Levie is managing on-the-fly more than before.

Since mid-March, employees at the business software company have worked from home. And there is no planned date for them to return to the office, in contrast to enterprise software maker Salesforce, which has set a tentative date.

“It started to get so comical, because we were updating people two times a week, and what we were doing was pushing dates,” Levie says. “We’re going to be working from home, honestly, for the foreseeable future, and we’ll give people ample time to go back to the office when it’s safe.”

In an interview with Fortune, Levie described how Box is being more careful about spending. Although it’s still filling open positions in critical areas, the company is more cautious about hiring because Levie says he “wants to protect the existing employees.”

In September, activist investor Starboard Value started urging Box to improve its finances, an obvious catalyst to Box’s new profitability plan. In reaction, the company debuted a new financial plan that emphasized profitability after years of losses.

In fiscal 2020, which ended Jan. 31, Box lost $144.3 million, 7.2% more than the $134.6 million it lost in the previous year. Sales grew 14% year-over-year to $696.3 million.

Starboard’s campaign had been ignited by Box’s poor stock performance. Its shares closed Tuesday at $16.90, or 27% lower than where they were on the day the company went public in January 2015.

In March, Box said it had reached an agreement with Starboard to install three new Starboard-approved board members and to create a new board committee “to identify and recommend opportunities for further improvement in growth and margin performance.”

“I think our settlement was super important,” Levie says. He described the company’s new Starboard-approved financial plan as being “ultimately very fortuitous” considering the coronavirus pandemic has required companies to be more financially prudent.

Box is best-known for its core online storage product. But over the years, it has spent hundreds of millions of dollars to build and market newer work-collaboration tools and security features.

The coronavirus pandemic has influenced the company’s product strategy. With the explosion in remote working, Box decided to pause developing some features in favor of newer tools specifically tailored for remote workers. These new tools include better integrations of Box’s tools with the popular video-conferencing service Zoom and a way for users to leave annotations on digital documents stored in Box that others can access during video meetings. 

Because of the pandemic, Levie says that many companies are spending more on basic cloud software used by remote workers, like chatting services or tools to help IT staff troubleshoot problems remotely. But at the same time, he says some companies are pausing big and costly tech upgrades, such as implementing trendy container technology that require businesses to upend their existing IT infrastructure. 

In general, the coronavirus pandemic has caused companies to reduce their technology spending, says Levie, pointing to retailers and small-to-medium sized businesses. But healthcare providers, biotech businesses, and some government agencies, he adds, are still buying new technology.

As for how the coronavirus has personally impacted Levie’s daily work, he says he has been spending more time with his one-year-old son Max, “way more than I would have been able to do.”

“The great thing is a late-night meeting now, I can still pop out for 25 minutes, give him a bath, and then come back and work versus a late-night meeting six months ago,” says Levie. “You’re stuck in a restaurant and you just miss those types of things.”

But being a parent and a worker during the coronavirus pandemic can be challenging, so Box is allowing workers a more flexible work schedule. 

“Honestly if somebody wants to do an hour of work from 9:00 to 10:00 p.m., and they want to not do three hours of work during the day, totally fine,” Levie said. “You have to have that type of flexibility.” 

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