Workday, a leading human capital management firm, has announced plans to cut approximately 1,750 jobs, which accounts for 8.5% of its workforce.
This decision is part of the company’s strategy to invest heavily in artificial intelligence (AI) and adapt to the current economic climate.
The decision comes at a time when the human capital management industry is facing lower spending by enterprise clients due to high interest rates, which are putting pressure on tech budgets.
Workday’s move is part of a broader trend of industry consolidation, with other tech companies also undergoing restructuring to stay competitive.
Reasons for Layoffs at Workday
The company aims to prioritize investments in AI and free up resources to expand Workday’s presence in various countries through the layoffs.
CEO Carl Eschenbach stated that the shift to AI is prompting companies to reevaluate their cost structures in anticipation of the upcoming adoption of agentic AI.
Workday anticipates incurring charges between $230 million and $270 million due to the restructuring plan.
These charges will primarily cover severance payments, employee benefits, and other related costs.
Despite the layoffs, Workday’s shares rose over 4% in premarket trading following the announcement.
Company’s Future Plans and Employee Support
In addition to the layoffs, Workday plans to shut down some of its office spaces.
The cost reduction plans are expected to be completed by the second quarter of fiscal 2026.
Despite the current layoffs, the company still expects to continue hiring in certain locations and positions over the next year.
Workday has committed to offering support to affected employees.
In the U.S., employees will receive a minimum of 12 weeks of pay, with additional weeks based on tenure.
Affected workers in other countries will be offered packages based on local standards.
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