Workday Layoffs: About 525 Jobs Cut in Second 2026 Round
Quick answer: Workday is cutting about 2.5% of its workforce, roughly 525 jobs, in its second 2026 layoff round. The cuts, disclosed in an SEC filing, mainly affect the Product and Technology team. Workday expects restructuring charges of about $65 million to $80 million and says it will keep hiring in key areas.
Key Takeaways
Workday disclosed in a Form 8-K that it is reducing about 2.5% of its workforce, mostly in its Product and Technology team.
The company employed more than 21,000 people at the end of January, putting the cut at roughly 500 to 525 employees.
Restructuring charges are expected to total about $65 million to $80 million, including $40 million to $55 million in cash severance and benefit costs.
This follows a February round that cut about 2% of staff, mainly in Global Customer Operations.
Workday says it will continue hiring in strategic areas and locations throughout fiscal 2027.
Workday, the human resources and finance software company based in Pleasanton, California, is laying off about 2.5% of its employees, its second workforce reduction this year. The company disclosed the cuts in a Form 8-K submitted to the Securities and Exchange Commission, saying reorganizations announced on September 29 will mostly affect its Product and Technology team.
With more than 21,000 employees at the end of January, the reduction works out to roughly 525 jobs, although several outlets have described it as about 500. The company also plans to reduce some leased office space.
Why is Workday cutting jobs?
In its filing, Workday said the changes are designed to "better align team structures with Workday's strategic growth priorities." The company did not name artificial intelligence as a reason, and it did not cite AI in its earlier layoff round either. Instead, it framed the move as a reorganization of specific functions, paired with a commitment to keep adding staff where it sees growth.
Still, the backdrop matters. Earlier this year, investor fears that businesses could use AI to build their own software instead of buying it, a selloff dubbed the "SaaSpocalypse," erased hundreds of billions of dollars from enterprise software valuations. Workday shares are down about 12% so far in 2026, according to Business Insider.
Co-founder Aneel Bhusri, who returned as CEO earlier this year, has pushed back on that narrative. On the company's August earnings call, he said no customer he had met was planning to swap Workday for software built in-house or bought from a startup, and that this had not changed from the prior quarter.
How much will the layoffs cost?
Workday expects total restructuring charges of about $65 million to $80 million, based on the breakdown in its filing, although some reports put the upper end at $85 million. The costs break down as follows:
Severance and benefits: about $40 million to $55 million in future cash spending on severance payments, employee benefits and related costs.
Stock-based compensation: about $10 million in non-cash charges.
Office space: about $15 million in non-cash impairment charges tied to leased offices.
Most of the charges, between $55 million and $70 million, will fall in the third quarter of fiscal 2027, with about $10 million more in the fourth quarter. Workday said employee-related actions should be substantially complete during the first quarter of fiscal 2028, subject to local requirements.
The costs will also weigh on reported profitability. The company expects its GAAP operating margin in the third quarter to run roughly 20 to 21 percentage points below its non-GAAP margin, while keeping its full-year revenue and non-GAAP margin guidance unchanged, according to Analytics Insight.
Who is affected this time?
The earlier cuts in February removed about 2% of staff, or around 400 people, mainly in Workday's Global Customer Operations team and other functions that do not directly generate revenue. This round shifts the focus to roles within the Product and Technology team.
About a week after the February layoffs, then-CEO Carl Eschenbach left the company. He was succeeded by Bhusri, who has now held the top job several times.
Background: a busy year for Workday
The layoffs follow several other developments. In July, Workday launched Workday Learning, powered by Sana, an AI-driven platform meant to help companies upskill employees. It also faces a lawsuit, reported in June, over alleged hiring bias in its AI-driven HR software. Last month, reports said private equity firm Silver Lake was in talks to acquire the company, a deal that could rank among the biggest software buyouts ever.
What happens next?
Workday is scheduled to report third-quarter results on November 27, which will show the restructuring charges and give investors a clearer picture of the company's direction. Despite the cuts, Workday said it plans to keep hiring in key strategic areas and locations throughout fiscal 2027, so openings may continue in some teams even as others shrink.
What this means for you
Like Workday, which is cutting some teams while still hiring in strategic areas, employers may reduce staff in one part of the business while adding in another. If you were affected by the Workday layoffs or work in enterprise software, these steps can help:
Review your severance package carefully. Check the timeline for benefits, any stock vesting changes and deadlines to sign agreements.
File for unemployment promptly. Eligibility rules and timing vary by state, so apply as soon as your last day is confirmed.
Watch Workday's own job board. The company says it will keep hiring in strategic areas, and internal or rehire opportunities sometimes open after reorganizations.
Highlight transferable skills. Product, engineering and platform experience with a large HR and finance system is valued by enterprise customers, consulting partners and other software vendors.
Build AI and learning skills. Workday's push into AI-powered tools reflects where the industry is investing, so hands-on AI experience can strengthen your next application.
Frequently Asked Questions
How many employees is Workday laying off?
Workday is cutting about 2.5% of its workforce. With more than 21,000 employees at the end of January, that equals roughly 525 people, though many reports describe it as about 500.
Which Workday teams are affected by the layoffs?
The cuts are mainly within Workday's Product and Technology team. The company is also reducing some leased office space.
Is this Workday's first layoff in 2026?
No. It is the second round this year. In February, Workday cut about 2% of its staff, mainly in its Global Customer Operations team.
Did Workday blame AI for the layoffs?
No. Workday has not cited artificial intelligence as a reason for either round of cuts this year. It said the changes align team structures with its strategic growth priorities.
Is Workday still hiring?
Yes. The company said in its filing that it plans to continue hiring in key strategic areas and locations throughout its fiscal 2027.
Sources
Published September 30, 2026. This article was compiled from the sources listed above with AI-assisted writing and automated fact-checking. We update stories when new verified information becomes available.