WORKDAY is cutting about 8.5 per cent of its workforce, making it the latest technology company to begin 2025 with headcount reductions.
The cuts will amount to about 1,750 workers, chief executive officer Carl Eschenbach wrote in a note to employees on Wednesday (Feb 5). “The environment we are operating in today demands a new approach, particularly given our size and scale,” he wrote.
Workday intends to hire in strategic areas such as artificial intelligence (AI), allow faster decision-making, and take on more people overseas, Eschenbach wrote. This will advance the company’s “ongoing focus on durable growth”, Workday said in a filing on Wednesday.
Technology companies have grown more accustomed to job reductions after a wave of massive layoffs at the start of 2023. Salesforce, Amazon.com, Microsoft and Meta Platforms have this year all moved to trim their corporate workforces.
Shares gained 6.3 per cent to close at US$276.17 on Wednesday in New York. Workday was one of the few major tech companies which had not drastically reduced its headcount in recent years. It had 20,493 employees at the end of October.
“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,” wrote Kirk Materne, an analyst at Evercore ISI.
Workday, which makes software for business tasks such as managing personnel, had recently signalled a greater focus on profitability. In August, the company said it would save money through selective hiring and using AI in its call centres and finance departments.
Because Workday had not yet resorted to job cuts, the reductions announced on Wednesday could signal issues with demand recovery or user growth, wrote Anurag Rana, an analyst at Bloomberg Intelligence
The company will also exit certain owned office space, it wrote in a filing on Wednesday. The plans overall will result in between US$230 million and US$270 million costs, which should be completed by the end of April 2025, it said. BLOOMBERG
