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But insists finances are strong
HR and finance specialist Workday is laying off about 8.5% of its workforce as it restructures to prioritise AI-driven efficiency.
The Pleasanton, California-based software company announced 1,750 job cuts in a securities filing on Wednesday, stating that the move is meant to align resources with evolving business needs.
In a note to employees, CEO Carl Eschenbach said the decision is based on the company’s need to embrace growth and drive efficiency gains through AI.
“As we start our new fiscal year, we’re at a pivotal moment. Companies everywhere are reimagining how work gets done, and the increasing demand for AI has the potential to drive a new era of growth for Workday,” Eschenbach wrote.
Workday also plans to exit certain office spaces, though details on affected locations remain unclear.
The restructuring is estimated to cost the company between $230 million and $270 million, mainly covering severance payments, benefits and related expenses.
Impacted employees in the USA will receive a minimum of 12 weeks’ pay, with additional compensation based on tenure. Workday has also pledged to provide career services, immigration support and extended stock vesting options. Employees outside the US will receive severance packages based on local standards.
Despite the layoffs, Workday insists its financial position is solid. The company reported $5.67 billion in revenue for the first nine months of fiscal 2025, up from $4.84 billion a year earlier, while net income more than doubled to $432 million. Full-year earnings are set to be released on 25th February.
Workday joins a growing list of tech firms trimming their workforce amid a shift toward AI-driven efficiencies.
In recent months, major tech players like Meta, Salesforce, Microsoft and Amazon have all announced layoffs as companies reassess their business strategies in the age of AI.