Workday erases 8.5% of workforce because of ... AI
That's 1,750 positions about to join the employment queue and it's only February
Workday is erasing 8.5 percent of its personnel under a restructuring scheme because… AI.
In a classic piece of corporate speak, the company said in an SEC filing that the job cuts are “intended to prioritize its investments and continue advancing Workday’s ongoing focus on durable growth.”
This will “result in the elimination of approximately 1,750 positions, or 8.5 percent of Workday’s current workforce. Workday expects to continue to hire in key strategic areas and locations throughout its fiscal year ending January 31, 2026. In connection with the Plan, Workday expects to exit certain owned office space.”
The irony of the real estate consolidation might not be lost on Reg readers who remember that Workday was among the first wave of tech companies that called for employees to haul their asses on-site because the CEO thought they’d have had enough of their families when forced to work at home during the pandemic.
The job cuts are despite Workday confirming there are no surprises contained in its profit and loss accounts for the most recent full fiscal year 2025 ended January 31, which are “inline with or above its guidance.” The results are scheduled to be published on February 25.
Neither was there a hint of any challenges in Workday’s financial results for the nine months ended October 31, when revenues were up to $5.67 billion from $4.84 billion in the prior year period, and next profit was $432 million up from $193 million.
The reason for the mini cull is AI. In a note to staff, Workday CEO Carl Eschenbach said “The environment we’re operating in today demands a new approach, particularly given our size and scale. We have to adapt by thinking differently, acting boldly, and investing strategically.
“Our journey at Workday has always been about challenging the status quo, embracing change, and putting our customers at the heart of everything we do. 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.
The restructuring is to “align our resources with our customers' evolving needs. This means investing strategically, helping teams work better together, bringing innovations to market faster, and making it easier for our customers and partners to work with us.”
Eschenbach said he is to “start meeting” with “affected employees shortly, with the goal of reaching as many as possible today, subject to local requirements where a consultation period is required.”
By freeing up resources, the CEO said he is going to concentrate on “prioritizing innovation investments like AI and platform development, and rigorously evaluating the ROI of others across the board.” He said Workday is also “evolving our processes to empower faster decision-making and to accelerate innovation.”
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He said the changes will also ensure “everyone has a clear understanding of their contributions to our shared success.” And Workday will expand its global footprint with hiring in “strategic locations with strong talent to better serve our customers worldwide.”
“To those who are leaving us, I want to express my sincere gratitude for your hard work, dedication, and the valuable contributions you've made to Workday's success. We are committed to providing support and resources to help you navigate this transition.
“Affected employees in the US will be offered a minimum of 12 weeks of pay, with additional weeks based on tenure. In addition, they will be offered additional vesting of restricted stock unit grants, career services, benefits support, and immigration support. Outside the US, affected employees will be offered packages based on local standards, which will be aligned with US packages where possible.” ®