Workday Inc. is cutting about 8.5% 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 Wednesday. “The environment we’re operating in today demands a new approach, particularly given our size and scale,” he wrote.
Workday maintains 22 offices in the U.S., according to its website, including two in Texas, one in Austin and one in Frisco.
Workday intends to hire in strategic areas such as 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 Wednesday.
Technology companies have grown more accustomed to job reductions after a wave of massive layoffs at the start of 2023. Salesforce Inc., Amazon.com Inc., Microsoft Corp. and Meta Platforms Inc. have this year all moved to trim their corporate workforces.
Shares jumped 5.5% in early trading Wednesday. Workday was one of the few major tech companies which hadn’t 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 signaled a greater focus on profitability. In August, the company said it would save money through selective hiring and using artificial intelligence in its call centers and finance departments.
The company will also exit certain owned office space, it wrote in a filing Wednesday. The plans overall will result in between $230 million and $270 million in costs, which should be completed by the end of April 2025, it said.
– Brody Ford for Bloomberg. Staff writer Sasha Richie contributed to this report.
