Workday Shares Drop 10% After Slow Revenue Projections
Workday shares fell 10% after the company projected slower subscription revenue growth and CEO Aneel Bhusri discussed using AI to replace human labor.
Shares of Workday fell approximately 10% following an earnings call on Tuesday. The slump occurred after the company projected slower subscription revenue growth for the upcoming fiscal year than Wall Street analysts had anticipated. This decline coincided with a broader software sector selloff fueled by investor concerns that artificial intelligence could disrupt the industry.
CEO Aneel Bhusri, who recently returned to the role succeeding Carl Eschenbach, framed AI as a growth opportunity. Bhusri focused on agentic models designed to improve business process execution and replace human labor to lower costs. He noted that Workday's AI products are not expected to generate meaningful revenue until later in the year.
While a company spokesperson stated that Bhusri's comments regarding labor replacement referred to general industry shifts rather than internal staffing, Workday recently laid off about 400 employees to realign resources. Despite the stock drop, the company reported growth in both revenue and net income for the quarter ending in January.
