(Reuters) – Workday said on Wednesday that it would reduce approximately 1,750 jobs, or 8.5% of its current workforce, because the human capital management company invests massively in artificial intelligence to counter an environment marty macroeconomic.
California -based company shares have increased by more than 4% in trading in the market.
The CEO of Workday, Carl Eschenbach, said that layoffs are necessary to prioritize investments such as artificial intelligence, while releasing resources to extend the presence of the company in different countries.
The layoffs come at a time when the human capital management industry faced the slower expenses of business customers, as high interest rates have put pressure on technological budgets.
Workday plans to take out around $ 230 million to $ 270 million in costs related to the cost reduction plan, of which around 60 to 70 million dollars are expected to be recognized in the fourth quarter.
As of January 31 of last year, the company had around 18,800 employees.
Workday faces strong competition from other players in a crowded industry while businesses consolidate their position through acquisitions to take market share.
Last month, Paychex said it acquires Paycor for 4.1 billion dollars in cash, while automatic processing of data processing acquired management service labor for around 1.2 billion dollars in cash in October.
Workday also said that it expects its tax financial results and its full-year financial results to be online with or above its previous forecasts.
The company has planned an annual turnover of $ 7.70 billion in November, while it provides that fourth quarter turnover is $ 2.03 billion – in accordance with analysts’ expectations, in accordance with data compiled by LSEG.
Workday also said that he planned to close certain office spaces he owns and that the actions associated with cost reduction plans should be completed in the second quarter of the 2026 fiscal year.
(Report of Zaheer Kachwala in Bengaluru; edition by Savio D’Souza and Leroy Leo)