Workday to cut 2.5% of workforce, affecting about 525 employees

### Workday Cuts 2.5% of Workforce, Mainly in Product and Technology

Workday, the human resources and financial management software company, is cutting about 2.5% of its workforce as part of a broader organizational restructuring focused primarily on its Product and Technology division.

The company disclosed the workforce reduction in a Form 8-K filed with the U.S. Securities and Exchange Commission on September 29. Workday said the changes are intended to realign its team structure with its strategic growth priorities.

The layoffs are expected to affect approximately 525 employees. At the same time, Workday said it will continue hiring for selected strategic roles and in key locations during fiscal 2027.

The restructuring is expected to cost the company between $65 million and $85 million. Workday anticipates recording $55 million to $70 million of those expenses during the third quarter of fiscal 2027, with the remaining $10 million expected in the fourth quarter.

The charges include an estimated $40 million to $55 million in future cash expenses associated with severance, employee benefits and related costs. The company also expects roughly $10 million in non-cash expenses tied to stock-based compensation.

Another $15 million in non-cash charges is expected from the impairment of certain leased office spaces as Workday adjusts its workplace footprint.

The latest reduction represents Workday’s second round of layoffs in 2026. In February, the company cut approximately 2% of its workforce, with most of those reductions affecting its Global Customer Operations organization.

The February layoffs were followed shortly afterward by a leadership change. Then-CEO Carl Eschenbach stepped down, with Workday co-founder and executive chair Aneel Bhusri returning as chief executive. Bhusri had previously served as CEO on three separate occasions.

The latest restructuring comes as Workday continues to expand its focus on artificial intelligence and AI-enabled workplace products. In July, the company introduced Workday Learning, an AI-powered learning platform developed with Sana.

Workday Learning is designed to help businesses improve employee skills and prepare their workforces for the growing adoption of AI. The platform provides employees with an AI-based personal tutor that can guide them through complex subjects, explain difficult concepts and suggest additional areas for learning.

For employers and administrators, the platform offers AI-powered tools intended to automate tasks such as learning assignments and employee campaigns.

The workforce reduction also comes amid reports of potential changes in Workday’s ownership. Private equity firm Silver Lake was reported in August to be in discussions to acquire the company in a transaction that could become one of the larger software buyouts in recent years.

Any such transaction would come as enterprise software companies face increasing pressure to adapt their products and business models to the rapid development of artificial intelligence.

Workday is scheduled to report its third-quarter fiscal 2027 financial results on November 27. The company’s latest restructuring indicates that it is continuing to adjust its workforce and operating structure while maintaining investment in areas it considers strategically important.