Workday Announces 1,750 Job Cuts Amid AI-Focused Growth Strategy
Workday is laying off 1,750 employees, accounting for 8.5% of its workforce, as part of its ongoing restructuring efforts.
CEO: Layoffs Necessary for Growth and AI Investments
In a memo to employees on Wednesday, CEO Carl Eschenbach described the layoffs as a strategic move to position Workday for future growth, particularly in artificial intelligence (AI) investments.
“As we start our new fiscal year, we’re at a pivotal moment,” Eschenbach wrote in a securities filing. “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.”
Employee Notifications and Support
Workday plans to notify most affected employees on Wednesday. Acknowledging the impact of the decision, Eschenbach encouraged employees to work remotely or head home for the day.
Laid-off U.S. employees will receive at least 12 weeks of severance pay, with additional compensation based on tenure. Employees in other countries will receive severance packages in accordance with local labor laws.
Office Space Reduction and Global Expansion
As part of the restructuring, Workday also plans to exit certain office spaces, though specific locations and timelines were not disclosed. Despite the layoffs, the company aims to expand its global presence by investing in strategic locations and will continue hiring for select roles.
Financial Impact and Industry Context
Workday anticipates restructuring costs between $230 million and $270 million, covering severance, employee benefits, and other related expenses.
The job cuts come as the tech sector continues to see widespread layoffs, with Intel, Cisco, and Apple also making significant workforce reductions over the past year. Many companies are restructuring to remain competitive while shifting their focus toward AI and evolving market demands.
Financial Performance and Market Reaction
Workday is set to release its full-year 2025 earnings later this month. In the third quarter, the company reported:
* Net income: $193 million (up from $132 million the previous year)
* Revenue: $2.16 billion (up from $2.09 billion)
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Despite the layoffs, Workday’s stock rose more than 2.5% in midday trading on Wednesday.
