Enterprise software provider Workday has announced plans to eliminate approximately 400 positions, representing about 2% of its global workforce. The move is part of a broader reorganization aimed at realigning company resources with strategic priorities.
The HCM software giant disclosed the restructuring in a regulatory filing Wednesday, revealing that the cuts will primarily affect “non-revenue-generating” customer-facing roles within its Global Customer Operations team.
The company emphasized that despite the reduction, it intends to continue hiring throughout fiscal 2027 in what it describes as “key strategic areas,” including revenue-generating positions designed to capitalize on emerging market opportunities.
Financial Impact and Restructuring Timeline
The restructuring will result in charges totaling approximately $135 million during the fiscal fourth quarter, which concluded in January. This financial impact underscores the scale of the reorganization, even as the company maintains that its overall fiscal performance remains on track with previous guidance.
The $135 million charge comprises several components. About $40 million will go toward future cash expenditures, primarily covering severance payments and employee benefits for affected workers. Another $15 million in non-cash charges relates to stock-based compensation adjustments resulting from the workforce reduction.
The largest portion of the charges, roughly $80 million, stems from non-cash expenses associated with office space and long-lived asset impairments.
Workday expects to substantially complete the reorganization by the first quarter of fiscal 2027.
The restructuring will also affect Workday’s reported profitability metrics. The company now anticipates its fourth-quarter GAAP operating margin will be 24 to 25 percentage points lower than its non-GAAP operating margin, with the full-year GAAP operating margin projected to be 22 to 23 percentage points lower.
Workday’s Restructuring History and Recent Developments
This marks the second major workforce reduction for Workday in just over a year. Last February, the company eliminated approximately 1,750 positions, about 8.5% of its workforce at the time, explicitly citing AI as a motivating factor behind the decision.
That earlier restructuring signaled Workday’s recognition that AI technologies were beginning to reshape operational efficiency requirements within the enterprise software sector.
Notably absent from the current announcement is any explicit mention of AI as a factor behind the latest cuts.
The beginning of 2026 has brought significant developments for the HCM platform provider beyond workforce adjustments.
In January, a federal court 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. The case represents one of the first major legal challenges to AI-powered recruitment technologies and could have far-reaching implications for the industry.
Days after that legal development, Workday unveiled ambitious expansion plans, committing to invest CAD $1 billion in its Canadian operations over the next five years.
This substantial commitment to Canada’s technology sector demonstrates the company’s continued confidence in long-term growth opportunities, even as it streamlines operations elsewhere.
Where Does Workday Go From Here?
Workday’s latest restructuring, which targets non-revenue-generating positions while simultaneously expanding in strategic areas, signals a shift in direction.
For employees, customers, and investors alike, the coming months will reveal whether this recalibration achieves its intended goals.
Workday’s upcoming earnings report on February 24 will provide the first opportunity to assess how the restructuring aligns with the company’s broader financial performance and strategic vision.
