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Workday Announces Layoffs of 1,750 Jobs Amid AI Investment Push

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Workday, a leading human capital management company, has announced plans to cut approximately 1,750 jobs, or 8.5% of its workforce, in an effort to allocate resources toward artificial intelligence (AI) development. This move is part of Workday’s strategy to adapt to a challenging macroeconomic environment, with high interest rates impacting tech budgets.

The news triggered a 4% jump in the company’s shares during premarket trading. CEO Carl Eschenbach emphasized that these layoffs are a necessary step to focus on AI investments and expand Workday’s global presence.

The human capital management industry is currently dealing with slower spending from enterprise clients, further complicating the business landscape. Workday expects to incur between $230 million and $270 million in charges due to the layoffs, with $60 million to $70 million recognized in the fourth quarter. As of January 31, the company employed roughly 18,800 people.

The company is facing increased competition as the industry consolidates. Recently, Paychex announced its acquisition of Paycor for $4.1 billion, and ADP purchased WorkForce Software for $1.2 billion.

Despite the layoffs, Workday is optimistic about its financial performance. The company expects its fourth-quarter and full-year financial results to meet or exceed previous forecasts, with subscription revenue expected to reach $7.70 billion for the year and $2.03 billion for the fourth quarter, aligning with analyst predictions. Workday also plans to close certain office spaces as part of its cost-reduction measures, with the initiatives expected to be completed by the second quarter of fiscal 2026.

 

Salesforce to Cut Over 1,000 Jobs While Expanding AI Workforce

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Salesforce is set to cut over 1,000 jobs as part of a strategic shift to focus more on selling artificial intelligence products. Despite the layoffs, the company will offer displaced employees the opportunity to apply for other positions within the organization, according to a report by Bloomberg News. The specific departments impacted by the layoffs have not been disclosed.

As of January 31, 2024, Salesforce employed 72,682 people, and the latest cuts come after a series of similar actions in recent months. In December 2023, CEO Marc Benioff highlighted the success of “Agentforce,” the company’s platform for AI-powered virtual agents, which secured over 1,000 paid deals. Earlier reports from January 2024 and July 2024 indicated smaller rounds of job cuts, including 700 and 300 roles, respectively.

Salesforce is actively hiring to bolster its workforce in AI sales, aiming to capitalize on growing demand for AI-driven solutions. The company is scheduled to report its quarterly earnings on February 26, 2025.

 

Renesas to Cut Less Than 5% of Global Workforce Amid Sluggish Chip Demand

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Renesas Electronics, a Japanese chipmaker specializing in automotive semiconductors, has announced plans to reduce its global workforce by less than 5%, which translates to fewer than 1,000 jobs. The decision comes as the company faces weaker-than-expected demand for its chips. Renesas, whose clients include major automakers Toyota and Nissan, also revealed that it would cancel planned salary increases for employees, including executives, scheduled for this spring.

Although the company did not specify the exact number of job cuts, it stated that the layoffs were aimed at improving its ability to execute its long-term growth strategy, particularly in light of ongoing market softness. Renesas is known for its automotive chips but is also working to diversify its business. In February, the company announced plans to acquire electronics design firm Altium for $5.9 billion as part of its efforts to broaden its portfolio.

Renesas’ shares dropped by 3% during Tokyo trading on Wednesday, reflecting investor concerns over the company’s response to the current market conditions.