Recently, enterprise resource planning software company Workday Inc. announced it would lay off about 8.5% of its workforce, or 1,760 positions, to drive company growth and increase investment in artificial intelligence. This news was communicated to all employees through a filing with the U.S. Securities and Exchange Commission, with CEO Carl Eschenbach noting in a memo that Workday is at a "critical moment," as various industries are rethinking the way work is done, and the growing demand for artificial intelligence presents new growth opportunities for the company.
Eschenbach stated in the memo, "This creates significant opportunities for us, but we need to make some adjustments to better align our resources with the changing needs of our customers." He emphasized that this means Workday will make strategic investments to help teams collaborate better, accelerate market innovation, and make it easier for customers and partners to work with the company.
However, for approximately 1,750 Workday employees, this "significant opportunity" means they will be laid off. The company will provide U.S. employees with at least 12 weeks of severance pay, with the exact duration adjusted based on the employee's length of service. Additionally, laid-off employees will receive extra vesting of restricted stock units, career services, benefits support, and immigration assistance.
In addition to the layoffs, the memo also mentioned a series of strategic adjustments. Workday will focus more on strategic investments, continue hiring in key areas, and commit to innovation in artificial intelligence and platform development. The company will also evaluate the return on all planned investments to ensure effective resource allocation. Eschenbach stated that Workday is redesigning processes for faster decision-making and innovation while clarifying roles and responsibilities to enhance team synergy. Furthermore, Workday plans to expand its global footprint by investing in strategic locations with strong talent to better serve its global customers.
According to a report by the Associated Press, Workday expects the layoffs and related workplace adjustments to incur costs of $230 million to $270 million, primarily for severance payments. Similar to Workday, Salesforce Inc. recently announced layoffs, stating on February 4 that it would cut more than 1,000 positions.
