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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.

 

Amazon Unveils “Buy with AWS” Button for Cloud Software Vendors

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Amazon is expanding its cloud business by introducing a new feature called the “Buy with AWS” button, aimed at streamlining the purchasing process for cloud software vendors and their customers. This feature, announced at Amazon Web Services’ (AWS) Reinvent conference in Las Vegas, allows software vendors to embed a payment option on their websites that enables customers with AWS accounts to buy services directly, taking advantage of pre-agreed discounts.

AWS, the leading cloud provider, brings in over $100 billion in annual revenue, and many software vendors, including Databricks, Wiz, and Workday, host their products on AWS. Now, these vendors can simplify the transaction process, providing a more seamless buying experience for users who are already part of the AWS ecosystem.

Matt Yanchyshyn, AWS’ vice president of marketplace and partner services, emphasized that the new button is designed to increase both customer and partner loyalty, ultimately improving sales conversion rates. The integration is simple for software companies, with the only requirement being that they sell through the AWS Marketplace, where Amazon has recently reduced fees to 3% or lower in some cases.

On the consumer side, the introduction of the “Buy with AWS” button mirrors Amazon’s successful “Buy with Prime” program, which allows retailers to integrate Amazon’s fulfillment network into their own websites. However, the AWS button offers a key difference—there are no fees for software vendors to embed it on their sites. This arrangement results in more revenue for Amazon, as the purchases are tied to services running on AWS.

“Buy with Prime is a separate initiative, but we work closely with that team,” said Yanchyshyn, highlighting the distinction between the two programs. “Buy with AWS is focused on a different use case.”

For cloud software vendors like Databricks, the new feature promises to simplify the purchasing process and increase AWS usage. David Meyer, senior vice president of product management at Databricks, noted that “Buy with AWS” will likely lead to a higher share of revenue from AWS deployments, as it simplifies the buying process.

Workday, which provides finance and human resources software, plans to implement the button for its Adaptive Planning product, acquired in 2018. The company hopes that the button will expedite procurement and make it easier for customers to adopt their software through the AWS Marketplace.

“If this works well, we may expand its use to more products,” said Matthew Brandt, Workday’s senior vice president of global partners. He also mentioned that buyers who are familiar with AWS may be more inclined to choose Workday as a provider.

Industry analysts, such as Ed Anderson from Gartner, believe that the “Buy with AWS” button could prompt other cloud providers to introduce similar features for third-party websites, a move that could further simplify cloud software transactions and increase cloud providers’ market share.