Workday Cuts 500 Jobs in Second Layoff Round of the Year

Workday is cutting approximately 500 jobs — about 2.5% of its workforce — in its second layoff round this year, according to a securities filing the software maker submitted Tuesday. The reductions fall mainly within the company's product and technology team, which Workday said it is restructuring to "better align team structures with Workday's strategic growth priorities."

The move lands hardest on one of enterprise software's most concentrated job categories. For product and technology staff at SaaS vendors, the message is blunt: even companies that plan to keep hiring are consolidating those roles around fewer strategic priorities.

Workday, which employed more than 21,000 people at the end of January, said it intends to continue hiring in strategic areas and locations throughout fiscal 2027. That means the layoffs are a reallocation, not a freeze — but the reallocation is happening inside the teams being cut.

The company also lowered its fiscal third-quarter earnings forecast and said restructuring charges from the latest round will reduce its fiscal 2027 third-quarter and full-year operating margins. Shares are down roughly 12% year to date.

This is the second round in 2026. Workday laid off about 400 employees in February, and roughly a week later then-CEO Carl Eschenbach stepped down. Cofounder and executive chair Aneel Bhusri, who had held the top job three times before, returned as chief executive.

Notably, Workday did not cite AI as a catalyst in either round. But the technology has weighed heavily on the sector. Earlier this year, the so-called SaaSpocalypse erased hundreds of billions of dollars from enterprise software market values, driven by investor concern that AI could make it cheaper for businesses to build software rather than buy it. Workday was among the vendors caught in that sell-off.

Bhusri has pushed back on the idea that customers are abandoning the platform. "Last quarter, I told you I hadn't met a single customer looking to replace Workday with something they're building internally or buying from a startup. One quarter later, that hasn't changed," he told analysts on an earnings call in August.

For individual workers, the numbers frame the market clearly. Two rounds totaling roughly 900 layoffs against a base of more than 21,000 employees — a combined cut of just over 4% — while the stock sits 12% below its starting point for the year. Hiring continues, but selectively, and in specific locations the company has not detailed. Product and technology candidates at SaaS firms now compete for a shrinking pool of openings concentrated around whatever a company designates as a "strategic growth priority," a category that can shift quarter to quarter as AI-driven uncertainty pressures valuations.

The August CEO quote and Tuesday's filing point in one direction: Workday expects to keep investing through fiscal 2027, but with a narrower organizational structure and margin discipline that its investors — rattled by the sector-wide AI reassessment — now demand.