HR software platform Workday is laying off 1,750 employees, or 8.5% of its workforce, it has been announced. According to a memo circulated on Wednesday, the layoffs are necessary for long-term growth, and will not interfere with the company’s plans to invest in new locations and employees over the course of the year.
The company predicts that it could incur up to $270 million in severance payments, employee benefits, and other costs, with all affected employees to be offered a minimum of 3 months of pay. Despite this, it still expects to make new hires over the course of the year, with the announcement signaling a strategic reshuffle as opposed to a harbinger of ill-fortune.
Mass layoffs continue to plague the tech sector, with Google, Meta, and Microsoft just some of the big players that have made similar announcements in recent weeks. With President Trump dismantling much of the apparatus set up to temper the rapid growth of AI, expect this trend to continue as more and more businesses turn to automation to reduce headcount.
Workday Calls Time on 1,750 Employees
HR software giant Workday is laying off 1,750 employees, amounting to 8.5% of its global workforce, it revealed in a memo on Wednesday. The company is acting in the interests of long-term growth, it said, with a particular focus on AI automation.
In the memo, CEO Carl Eschenbach drew attention to how “companies everywhere are reimagining how work gets done,” going on to say that “the increasing demand for AI has the potential to drive a new era of growth for Workday.” Those plans are finally being put into action, it would seem.
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Most impacted employees were notified yesterday. They will be compensated with at least 12 weeks of pay, with additional weeks based on duration of tenure. In addition to the layoffs, Workday expects to leave certain office spaces, although it hasn’t yet disclosed which areas would be affected.
Workday Shaping Up for AI Future
Even as it rolls back some of its international presence, Eschenbach’s memo outlines the company’s intention to invest in “strategic locations” as part of a wider restructure.
Workday also plans to continue hiring over the course of the year, with AI thought to be a key growth area for the HR company. This latest round of layoffs is thought to fetch between $230 million and $270 million in severance pay and other fees, but those losses will not deter Eschenbach.
Later this month, the company will release its earnings results for the 2025 fiscal year, which paint a glowing picture. In the third quarter, it posted a net income of $193 million, as well as $2.16 billion in revenue. In the previous quarter, it recorded $132 million in net income and $2.09 billion in revenue. Senior leaders will be highly encouraged by this quarterly growth – even if affected employees are left with a bitter taste.
Tech Layoffs Set to Continue as AI Development Accelerates
Workday joins the likes of Microsoft, Google, and Meta in announcing big job cuts in recent weeks. Across the tech sector, companies are feeling the heat, with the surge of layoffs that has characterized much of the last few years showing no signs of abating.
In fact, this is set to continue as companies increasingly look to AI automation as a solution to their workforce woes. In his determination to win the AI race, President Trump has revoked a 2023 executive order that sought to reduce the potential risks of AI. Added to this, the recent emergence of DeepSeek has given tech players renewed impetus to invest heavily in their personal strategies.
As the race hots up, it is staff that will continue to bear the consequences.
