Workday layoffs: Human capital management firm to slash 8.5% of workforce amid AI surge
Workday will cut 1,750 jobs, about 8.5% of its workforce, to invest in AI and adapt to the economic climate. The company anticipates $230-$270 million in charges due to this plan, while its shares rose over 4% in premarket trading.
Workday layoffs: The human capital management firm Workday will cut nearly 1,750 jobs, constituting 8.5% of its current workforce, as the company focuses on heavily investing in artificial intelligence adjusting to the macroeconomic environment, reported Reuters.
The layoffs are important in prioritising investments such as artificial intelligence and freeing up resources to expand to several countries, the report said citing Workday CEO Carl Eschenbach.
The company's shares rose over 4 per cent during the premarket trading.
“We believe that the shift to AI is going to make every company in software take a hard look at its cost structure in front of the upcoming adoption of agentic AI,” reported Bloomberg quoting Kirk Materne, an analyst at Evercore ISI.
The recent development comes at a time when the human capital management industry is struggling with lower spending by enterprise clients due to high interest rates, which are adding pressure to tech budgets.
The company plans to incur charges in the range of $ 230 million to $ 270 million due to the cost reduction plan, which is expected to be reflected in the fourth quarter.
Workday has nearly 18,800 employees until January 31, 2024.
The company faces immense competition from other industry players as they consolidate their positions through acquisitions to gain market share.
In January, Paychex informed that it plans to acquire Paycor for $4.1 billion in cash, whereas in October Automatic Data Processing acquired management services provider WorkForce Software for nearly $1.2 billion in cash.
The human resource management company expects that fourth-quarter and full-year financial results will align with or exceed its prior forecast.
Workday expects annual subscription revenue of $7.70 billion in November and fourth-quarter subscription revenue of $2.03 billion—in accordance with expectations of analysts, the report said citing data compiled by LSEG.
In addition to layoffs, the company stated that it expects to shut down some of its office spaces. The cost reduction plans are expected to be completed by the second quarter of fiscal 2026.
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Business NewsCompaniesWorkday layoffs: Human capital management firm to slash 8.5% of workforce amid AI surge
First Published:5 Feb 2025, 07:56 PM IST
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