Workday Lays Off 500 Employees and Trims Earnings Forecast

Workday is laying off approximately 500 employees, roughly 2.5% of its workforce, primarily within its product and technology teams. The company stated the reductions are intended to align team structures with strategic growth priorities. This action follows a previous round of layoffs in February that saw 400 employees terminated.

Alongside the workforce cuts, the company trimmed its fiscal third-quarter earnings forecast. Workday noted that restructuring charges will reduce operating margins for both the third quarter and the full fiscal year of 2027. Despite these cuts, the company plans to continue hiring in strategic areas and locations throughout the fiscal year.

While investors have raised concerns that artificial intelligence could diminish demand for enterprise software, Workday did not cite AI as a catalyst for the layoffs. Cofounder and executive chair Aneel Bhusri has maintained a positive outlook on the company's prospects, previously stating that he had not seen customers replacing the software with internal builds or startup alternatives.