Workday announced plans to cut approximately 1,750 jobs, or 8.5 percent of its workforce, as it ramps up investment in artificial intelligence.
The move, aimed at prioritizing AI-driven initiatives and expanding its global footprint, was described by CEO Carl Eschenbach as necessary to ensure long-term growth.
The layoffs come as enterprise clients in the human capital management sector have reduced spending due to high interest rates straining tech budgets. In connection with the cost reduction plan, Workday expects to incur charges between $230 million and $270 million, with $60 million to $70 million recognized in the fourth quarter. As of January 31 last year, the company employed approximately 18,800 people.
Competition in the human capital management space remains intense, with firms pursuing acquisitions to strengthen their market position, Reuters news report said.
Paychex recently announced a $4.1 billion acquisition of Paycor, while Automatic Data Processing acquired WorkForce Software for $1.2 billion in October.
Against this backdrop, Workday has reaffirmed its financial outlook, expecting fiscal fourth-quarter and full-year results to meet or exceed previous projections. The company had forecast annual subscription revenue of $7.70 billion and fourth-quarter subscription revenue of $2.03 billion, in line with analyst expectations.
In addition to workforce reductions, Workday plans to close certain office spaces as part of its cost-cutting measures. The company anticipates completing these restructuring efforts by the second quarter of fiscal 2026, reinforcing its commitment to AI and global expansion while streamlining operations.
InfotechLead.com News Desk
