Workday to Cut 400 Jobs in Strategic Restructuring

Key Restructuring Details

Workday Inc. announced a plan to reduce its workforce by approximately 400 employees, which accounts for about 2% of its global team. The software company stated the move is part of a broader reorganization effort. The company anticipates incurring charges of approximately $135 million related to this action, primarily in the fourth fiscal quarter.

Strategic Realignment Overview

The job reductions are intended to better align company resources with its strategic priorities. According to a regulatory filing, the cuts will primarily impact non-revenue generating, customer-facing roles within the Global Customer Operations team. Despite these reductions, Workday affirmed its intention to continue hiring for key strategic areas and additional revenue-generating positions throughout fiscal 2027 to pursue market opportunities.

Financial and Market Impact

The expected $135 million in charges consists of roughly $40 million in cash expenditures for severance and benefits, $15 million in non-cash stock-based compensation charges, and $80 million in non-cash charges for impairments of office space and other assets. While Workday expects its Q4 and full-year fiscal 2026 results to meet prior guidance, its GAAP operating margin is now projected to be significantly lower due to the restructuring costs.

Summary and Outlook

This restructuring appears to be a strategic realignment rather than a broad cost-cutting measure, focusing the company's investments in growth areas. The full reorganization is expected to be completed by the first quarter of fiscal 2027. Investors will be watching for further details during the company's upcoming earnings report for the fourth quarter and full fiscal year 2026, scheduled for February 24, 2026.

FAQ

Q: How many jobs is Workday cutting?
A: Workday is cutting approximately 400 jobs, which represents about 2% of its total workforce.

Q: Why is Workday reducing its workforce?
A: The company is undergoing a reorganization to better align its resources with strategic priorities and focus on key growth areas.

Q: What is the financial cost of this restructuring?
A: Workday expects to incur charges of approximately $135 million, which will impact its fourth-quarter GAAP operating margin.

Source: Investing.com