Workday has announced another round of layoffs, affecting nearly 2.5% of its workforce on September 29, 2026. The enterprise software company plans to cut about 500 workers, mainly across product and technology teams.
Workday said the restructuring will align teams with its strategic growth priorities and reshape selected office operations. The company expects most employee changes to progress through fiscal 2027, subject to local requirements.
The latest Workday layoffs mark the company's second workforce reduction this year after February cuts affected around 400 employees. The Pleasanton, California-based company employed more than 21,000 people at January's fiscal year-end.
Workday expects restructuring charges between USD 65 million and USD 80 million from employee changes and office reductions. Around USD 55 million to USD 70 million of those charges should hit the fiscal third quarter.
The restructuring will also pressure Workday's GAAP operating margin during the fiscal third quarter. Workday expects this margin to be approximately 20 to 21 percentage points below its non-GAAP margin. The company kept its broader fiscal 2027 revenue and non-GAAP operating margin guidance unchanged.
Workday plans to keep hiring across key strategic areas and locations during fiscal 2027. The approach signals a workforce shift toward selected business priorities rather than an across-the-board hiring freeze. Employee-related restructuring actions should reach substantial completion during the first quarter of fiscal 2028.
The February layoffs mainly targeted customer operations and other non-revenue-generating functions during an earlier company reorganization.
The latest cuts instead concentrate more heavily on Product and Technology roles, changing the focus of restructuring. Workday also reduced selected leased office space as part of the current organizational changes.
Workday has not identified artificial intelligence as a direct reason behind either workforce reduction announced this year. The broader enterprise software market has faced investor concerns surrounding AI's potential impact on software demand.
Workday co-founder Aneel Bhusri has continued defending the company's position among enterprise customers. In August, Bhusri said customers were not seeking Workday replacements through internal builds or startup alternatives.
The latest Workday layoffs therefore combine cost restructuring with a sharper focus on selected growth areas. The company now faces a sizable restructuring bill while continuing targeted hiring across strategic parts of its business.
Also Read: Xbox Layoffs: Satya Nadella Calls Gaming Division Streamlining ‘Great’