The tech industry is off to a rough start in 2025, with major companies like Salesforce, Meta, Microsoft, and Amazon announcing job cuts. Now, Workday, Inc. (Nasdaq: WDAY), a leading provider of cloud-based human resources software, is joining the trend with 1,750 layoffs—roughly 8.5% of its global workforce.
Why Workday Is Laying Off Employees
In a memo to employees on Wednesday, CEO Carl Eschenbach explained that the layoffs are part of a broader effort to realign resources and focus on artificial intelligence (AI) investments.
“As we start our new fiscal year, we’re at a pivotal moment,” Eschenbach wrote. “Companies everywhere are reimagining how work gets done, and the increasing demand for AI has the potential to drive a new era of growth for Workday.”
While the layoffs are difficult, Workday sees them as a necessary step toward future innovation. The company plans to continue hiring in key strategic areas and locations throughout the fiscal year ending January 31, 2026.
Employee Impact and Severance Packages
Workday aims to notify most affected employees by Wednesday. Eschenbach acknowledged the emotional weight of the decision and encouraged employees to work remotely or leave the office early to process the news.
For those impacted, U.S.-based employees will receive at least 12 weeks of severance pay, with additional compensation based on tenure. Employees in other countries will be offered severance packages based on local labor laws.
Restructuring Plans and Cost Estimates
Beyond job cuts, Workday is also looking to exit certain office spaces as part of its restructuring. However, the company has not disclosed which locations will be affected or the exact timeline for these changes.
Workday estimates that the total cost of the restructuring will range from $230 million to $270 million, with $145 million to $175 million allocated to severance packages, employee benefits, and other costs.
Despite these reductions, the company remains committed to expanding its global reach and “investing in strategic locations”, Eschenbach noted.
Tech Industry Layoffs Continue
Workday is the latest in a growing list of tech giants cutting jobs amid industry-wide restructuring. Since the start of 2025, 42 tech companies have laid off more than 10,800 workers, according to Layoffs.fyi.
Other major players, including Meta, Cisco, and Apple, have also downsized their workforces in response to shifting consumer demands and increased competition in AI-driven innovation.
Looking Ahead
Workday’s restructuring is a clear sign that AI will play a central role in the company's future. While layoffs are never easy, the company believes that strategic investments in AI and platform development will help drive long-term growth.
With its earnings report on the horizon, all eyes will be on Workday to see how these changes impact its financial performance moving forward.
Explore, Engage, Elevate: Discover Unlimited Stories on Rise Blog
Let us know your email to read this article and many more, plus get fresh jobs delivered to your inbox every week 🎉
