Workday has announced a significant leadership transition, with CEO Carl Eschenbach stepping down after three years in the role. Co-founder Aneel Bhusri will return to lead the company.
The leadership shuffle follows Workday’s recent announcement of job cuts affecting approximately 400 employees, about 2% of its global workforce. While the cuts represent a relatively modest share of total headcount, they reflect a company repositioning itself for what executives describe as a transformative period in enterprise software.
Speaking on the state of the market, Bhusri said,
“We’re now entering one of the most pivotal moments in our history. AI is a bigger transformation than SaaS, and it will define the next generation of market leaders.”
The transition underscores the challenges facing Workday as it balances operational efficiency with growth ambitions in an increasingly competitive, AI-driven market landscape.
A Year of Workforce Volatility
Eschenbach succeeded Bhusri as CEO in January 2024. In February 2025, the company announced plans to eliminate 8.5% of its workforce, about 1,750 positions, as part of a restructuring initiative aimed at freeing up resources for AI investment.
At the time, CFO Zane Rowe indicated that the company would rehire for different roles and skills, ultimately maintaining similar headcount levels.
However, that promise proved short-lived. By September, when activist investors acquired a $2 billion stake in the company, Eschenbach publicly retracted the rehiring commitment. “We don’t need more headcount to drive the business forward,” he told investors, signaling a fundamental shift in the company’s growth strategy.
The latest restructuring of staff, announced shortly before Eschenbach’s departure, is expected to result in approximately $135 million in charges during the fiscal fourth quarter, which concluded in January. The financial impact underscores the company’s effort to realign its cost structure.
Despite the cuts, Workday has stated it intends to continue selective hiring throughout fiscal 2027 in what it describes as “key strategic areas.” These include revenue-generating roles designed to capture emerging market opportunities.
Market Pressures and Strategic Repositioning
Workday’s leadership transition and workforce reductions unfold against a backdrop of significant volatility.
In January, a US judge authorized notices to be sent to potential plaintiffs in a landmark case alleging that Workday’s AI-driven hiring tools discriminate against certain job seekers.
Equally, the company’s share price has fallen about 40% over the past year. Investors are reportedly beginning to reassess the valuation of software-as-a-service companies in light of rapid advances in AI technology.
The involvement of activist investors, who took their $2 billion stake in September, has added pressure for greater operational discipline and stronger financial results.
Analysts at Jefferies called the timing of the move surprising. “Co-founder Aneel Bhusri taking over raises questions, given he turned the company over to Carl in 2024 as sole CEO to focus on product and AI,” they wrote. “Something isn’t right.”
The leadership change suggests that the board concluded a different approach was needed to navigate these challenges.
AI as Defining Challenge and Opportunity
As Workday enters this new chapter under returning CEO Aneel Bhusri, the company faces both significant challenges and substantial opportunities. A key focus will likely be on advancing AI capabilities to keep its product portfolio aligned with market evolution.
As a parting move, Eschenbach announced in January that Workday would invest C$1 billion in its Canadian operations over the next five years, with a large portion dedicated to AI development.
The company’s willingness to restructure its workforce, refocus on revenue-generating activities and AI, and return to founder-led leadership reflects a recognition that bold change is needed to reverse a difficult year.
