Workday Cuts 8.5% of Workforce in Cost-Saving Move
Workday Inc. has announced plans to lay off approximately 1,750 employees, representing 8.5% of its workforce. This move follows a trend of technology companies implementing cost-cutting measures in 2023.
In a memo to employees, CEO Carl Eschenbach stated that the current economic environment necessitates a revised approach. The company aims to hire strategically in areas such as AI, optimize decision-making, and expand its overseas operations.
Workday's focus on "durable growth" is a key factor in this restructuring. The company believes that the shift towards AI will prompt software companies to re-examine their cost structures.
Analyst Kirk Materne of Evercore ISI highlights the potential impact of AI on workforce reductions: "The shift to AI is going to make every company in software take a hard look at its cost structure."
Workday recently emphasized its commitment to profitability. Previous measures included selective hiring and the implementation of AI in call centers and finance departments. The company will also vacate certain office spaces.
These cost-cutting initiatives are expected to generate savings of $230 million to $270 million, to be realized by April 2025.
Workday has been one of the few major tech companies to avoid significant headcount reductions in recent years. As of October, the company employed 20,493 individuals. The latest layoffs mark a shift in its strategy.
In early trading on Wednesday, Workday shares rose 5.5%.