Activist pushes EPAM Systems for buybacks

By the Editorial Team · Tuesday, September 1, 2026

Activist investor Engine Capital, holding a 1.5% stake in EPAM Systems, has called on the company to greatly expand its share buyback program or explore a potential sale due to concerns over AI-driven disruptions and a 42% decline in EPAM’s stock price this year. The fund proposes using EPAM’s cash reserves and cash flow to repurchase up to 80% of shares by 2028, warning that if the board does not commit to this strategy, a formal strategic review involving independent directors should be initiated.

Activist hedge fund Engine Capital has urged technology consultancy EPAM Systems to significantly increase its share buyback program or consider putting the company up for sale amid concerns that artificial intelligence (AI) developments could negatively impact its business model.

In a letter to EPAM’s board, reviewed by multiple sources, Engine revealed its 1.5 percent equity stake and recommended that the company capitalize on its current depressed valuation by repurchasing between 60 and 80 percent of outstanding shares by the end of 2028. EPAM’s share price has fallen by approximately 42 percent this year, reducing its market value to about $5.9 billion.

EPAM Systems, which employs over 50,000 IT professionals, specializes in outsourced technology and software solutions for companies undergoing digital transformations. Like many technology firms, it has faced a sector-wide sell-off early this year, fueled by investor anxiety that advances in AI could disrupt traditional service offerings.

Arnaud Ajdler, managing partner at Engine Capital, proposed that EPAM utilize its existing cash reserves of around $750 million, as well as projected free cash flows and debt capacity, to fund a more aggressive share repurchase strategy. Ajdler argued that if the board is unwilling or unable to confidently pursue an expanded buyback program, it should initiate a formal strategic review. Such a process would be overseen by independent directors and supported by financial advisers to assess potential valuations from strategic or financial buyers.

Engine Capital, founded in 2013 and managing approximately $1.5 billion in assets, has a history of activist campaigns resulting in notable corporate changes, including facilitating the $5.5 billion sale of uniform provider UniFirst to Cintas and advocating for the breakup of UK-based industrial group Smiths Group.

Neither EPAM Systems nor Engine Capital provided comments in response to inquiries regarding the letter or its proposals.

The situation illustrates increasing shareholder activism within the technology sector as investors respond to uncertainties introduced by rapid AI advancements. While buybacks are often used to return value to shareholders and signal confidence, the suggestion to consider a sale reflects the challenges some firms face in adapting to evolving market dynamics and disruptive technologies.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.