What Workday’s Job Cuts Mean for the Company’s Future

Workday is planning to cut around 400 employees from its workforce, according to reports from Bloomberg. 

The cuts, which amount to 2% of the company's workforce, are focusing on “non-revenue generating,” customer support roles, the company has said in a regulatory filing. 

According to Workday, these cuts will help the company better invest in its priority areas, but will lead to significant short-term costs. 

In its filing, the company said: “Workday estimates that it will incur approximately US$135 million in charges … consisting of approximately US$40 million of future cash expenditures related to severance payments, employee benefits, and related costs and approximately US$15 million in non-cash charges for stock-based compensation.

“The charges also consist of approximately US$80m in non-cash charges related to the impairment of certain office space and long-lived assets.”

Workday’s reductions in headcount

The company most recently made 1,750 employees redundant in February 2025, which cut down its total workforce at the time by 8.5%. 

Carl Eschenbach, CEO of Workday, said in a note to employees that these cuts were a “difficult, but necessary, decision”. 

According to Workday, the changes were made so the company could further prioritise its AI capabilities.

Carl said: "We have so much opportunity ahead of us, especially with the potential of AI, and we have a strong foundation to build upon. 

“While we have work ahead to realise our vision and full potential, today is about focusing on taking care of each other. 

“I am proud and grateful for how you support one another, our customers and partners – particularly in moments like these.”

How Workday is leveraging new AI capabilities

These changes are being made as the company looks to restructure its workforce with a focus on its AI development, as it faces significant competition from companies such as SAP and Oracle, who are also rapidly building up AI capabilities.

The company is not instituting a hiring freeze, however, as it continues to hire for data and AI roles amid this transformation. 

Workday’s key focus areas for AI growth are centred on providing intelligent insights and automating tasks for workforce management, financial processes and talent development. 

Key usages the company is developing AI solutions for include skills analysis, personalised career pathing, automated job descriptions, intelligent expense auditing and predictive analytics for talent retention.

Ashley Goldsmith, Chief People Officer at Workday, discussed the company's AI capabilities in a company podcast, saying: “With AI, things that used to take days or sometimes even weeks are mere moments now. That's really transformed what that team can do with much richer research."

On the same podcast, Carl says: "Technology is incredibly powerful... But technology only enables change. It takes humans to implement it, support it and leverage it. It's always going to come back to humans, even if there's a massive technology shift like we're going through”. 

Despite these changes, Workday’s stock price has dropped 34% from 2025 to 2026, with a lack of confidence from investors in the company’s ability to rapidly scale and deploy AI solutions.