Workday Announces Job Cuts Affecting 3% of Global Workforce

Workday Inc., a maker of software for business tasks such as human resources, said it was eliminating 3% of its global workforce in response to a “challenging” global economic environment.

The company had about 17,000 employees as of July, according to data compiled by Bloomberg.

“We have decided to restructure and realign some teams across Workday, leading to the difficult decision to eliminate roles,” the company said in an email to staff, adding that the majority of cuts would be “happening in our Product & Technology organization.”

It said employees would be notified by the end of the day, with US employees receiving three months of pay and two additional weeks of pay for each year of service, among other benefits. Non-US workers would be offered “similar packages” based on local policy.

“These moves are not the result of over-hiring,” the company said. “Based on what we know today, we have no plans to take similar actions of this size in the foreseeable future.”

Workday in December named Carl Eschenbach, a board member, partner at Sequoia Capital and veteran industry executive, as co-Chief Executive Officer with co-founder and co-CEO Aneel Bhusri. At the time, the software company affirmed its forecast for the current quarter and its preliminary outlook for fiscal 2024. Revenue growth has remained steady at 19% to 22% the past three years, although analysts estimate, on average, that sales will increase 17% to $7.26 billion in fiscal 2024 beginning in February.

The announcement comes as the tech industry is wiping out jobs at the fastest pace in at least two decades. In November, the most recent month for which data is available, the sector announced 52,771 cuts, for a total of 80,978 over the course of the year, according to consulting firm Challenger, Gray & Christmas Inc. It was the highest monthly total for the industry since the firm started keeping data in 2000.

Those reductions were followed by Amazon. com Inc.’s decision early in January that it would let 18,000 employees go, Salesforce Inc.’s announcement that it would cut its workforce by 10% or about 8,000 employees, Microsoft Corp.’s move in mid-January to slash 10,000 jobs this year and Google parent Alphabet Inc.’s statement that it would eliminate 12,000 positions.

Read more: Google’s Pichai Tells Staff Cuts Avoided ‘Much Worse’ Issues

Workday shares dropped 39% last year amid a broad decline in the enterprise software industry, but had gained 5.5% through Monday’s close.