Workday Cuts Hundreds of Jobs as CEO Steps Down — Co-Founder Returns with AI Vision

Workday, the enterprise software giant known for its cloud-based human resources and finance platforms, is going through one of its most turbulent periods in company history. In February 2026, the Pleasanton, California-based company cut hundreds of jobs — roughly 2% of its entire workforce — while simultaneously announcing that CEO Carl Eschenbach had stepped down from his position after barely more than a year in the role. In his place, co-founder Aneel Bhusri is returning to the corner office with a bold new mandate: pivot the company toward an AI-first future.

The leadership shakeup and workforce reduction come at a challenging moment for the company. Workday stock has declined approximately 40% over the past year, and the broader tech sector continues to shed jobs at a staggering pace — more than 38,400 positions eliminated industry-wide in 2026 alone. For the hundreds of affected employees, the news raises urgent questions about severance, job prospects, and what comes next. For the rest of the tech workforce, it is yet another signal that the industry's restructuring era is far from over.

Here is everything you need to know about the Workday layoffs, the CEO departure, the severance details, and the company's new AI-driven direction under Bhusri's returning leadership.

What Happened at Workday?

In early February 2026, Workday confirmed two major pieces of news in rapid succession. First, the company announced a new round of layoffs affecting approximately 375 employees, representing about 2% of its global workforce. Second, CEO Carl Eschenbach was stepping down from the top role, effective immediately. The dual announcements sent shockwaves through the enterprise software industry and the broader tech job market.

According to a WARN Act filing obtained by CNBC, at least 154 of the layoffs were concentrated at Workday's headquarters in Pleasanton, California. The company described the cuts as targeting "non-revenue generating roles" within its customer-facing teams — a designation that typically includes positions in customer support, customer success, onboarding, training, and account management that do not directly generate subscription or licensing revenue.

This is not the first time Workday has made significant headcount reductions in recent memory. In February 2025, the company carried out a much larger round of layoffs that eliminated approximately 1,750 positions — roughly 8.5% of its workforce at the time. That earlier round was part of a broader cost-cutting initiative that many enterprise tech companies undertook as post-pandemic growth rates slowed and investors demanded improved profitability.

The fact that Workday is once again cutting staff — this time while simultaneously changing its top leadership — suggests the company is in the midst of a deeper strategic reset, not simply trimming around the edges. The combination of leadership turnover and workforce reductions is often a precursor to a significant change in corporate direction, and in this case, that new direction appears to be a full-throttle push into artificial intelligence.

Why Did CEO Carl Eschenbach Step Down?

Carl Eschenbach took over as Workday CEO in January 2024, succeeding co-founder Aneel Bhusri, who had led the company since its founding. Eschenbach came to the role with a strong resume — he previously served as a senior executive at VMware and as a partner at Sequoia Capital, one of Silicon Valley's most prestigious venture capital firms. His appointment was widely seen as a move to bring operational discipline and a sharper growth focus to a company that had matured past its startup phase.

However, Eschenbach's tenure proved to be brief and, by several financial metrics, disappointing. During his approximately 13 months as CEO, Workday's stock price declined roughly 40%, erasing billions of dollars in market capitalization. While the broader enterprise software sector also faced headwinds during this period — including rising interest rates, cautious enterprise spending, and growing competition from AI-native startups — the magnitude of the decline raised questions about whether Eschenbach was the right leader for the company's next chapter.

Workday Vice Chair Mark Hawkins offered measured praise for the departing CEO in an official statement, saying that Eschenbach had led the company "through an important chapter." But the diplomatic phrasing did little to conceal what many industry analysts interpreted as a mutual decision — or an outright board-initiated change — driven by underperformance. When a CEO departs after barely a year with gracious but vague public statements, the subtext in corporate America is often that the board lost confidence in the executive's ability to deliver results.

The timing is also notable. Eschenbach's departure came just weeks after Workday reported its latest quarterly earnings, which showed decelerating subscription revenue growth and softer-than-expected guidance for the year ahead. For a company that Wall Street had long valued as a high-growth SaaS leader, the slowdown was a red flag that could no longer be explained away by macroeconomic conditions alone.

How Much Severance Did the Outgoing CEO Receive?

While hundreds of Workday employees face the uncertainty of job loss, the financial details of Carl Eschenbach's departure tell a starkly different story. According to SEC filings reviewed by CNBC, Eschenbach's severance package totals more than $7 million and includes several components:

• A $3.6 million lump-sum severance payment
• An additional $2.6 million in cash severance payments
• A $941,000 additional bonus payment
• Accelerated vesting of previously granted stock awards

The total package exceeds $7 million in guaranteed cash and stock value — and that figure does not include the full potential value of his accelerated equity, which could be worth significantly more depending on the stock price at the time of vesting. It is worth noting that Workday's stock price, while down 40% from its highs, still trades at a substantial per-share value, meaning the accelerated stock alone could add millions more to Eschenbach's total compensation upon departure.

The disparity between executive severance and rank-and-file layoffs is a recurring theme in tech industry restructurings. For the roughly 375 employees being let go, typical severance at enterprise software companies ranges from a few weeks to a few months of pay, often with limited continuation of health benefits. The contrast between a CEO departing with a multimillion-dollar cushion and employees losing their livelihoods with comparatively modest support has drawn criticism on social media and within the broader tech labor community.

This pattern is not unique to Workday. Across the tech industry, departing CEOs and senior executives routinely receive severance packages that dwarf what the average laid-off worker can expect. But the optics are particularly sharp when the layoffs and the CEO exit happen on the same news cycle, forcing employees to process their own job loss alongside headlines about their former boss's golden parachute.

How Many Jobs Did Workday Cut?

Workday confirmed that the February 2026 layoffs affected approximately 2% of its global workforce. Based on the company's most recently reported headcount of roughly 18,800 employees, that translates to approximately 375 positions eliminated. The California WARN Act filing specifically documented 154 job cuts at the company's Pleasanton headquarters, though additional layoffs were spread across other offices and remote positions nationwide.

The company characterized the affected roles as "non-revenue generating" positions within customer-facing teams. In enterprise software, this language typically refers to roles that support the customer relationship but are not directly tied to closing new deals or generating subscription revenue. This includes functions such as customer success management, implementation support, technical onboarding, training specialists, and certain account management roles. These positions are critical to customer satisfaction and retention, but in cost-cutting environments, companies often view them as more expendable than direct sales or core engineering roles.

When combined with the February 2025 layoffs that eliminated approximately 1,750 positions (8.5% of the workforce), Workday has now cut more than 2,100 jobs in just over 12 months. That represents a significant contraction for a company that, as recently as 2023, was aggressively hiring and expanding its global footprint. The back-to-back layoff rounds paint a picture of a company that is fundamentally rethinking its operational model and cost structure.

Workday's layoffs are part of a much larger pattern across the technology sector. According to tracking data from Layoffs.fyi, tech companies have collectively eliminated more than 38,412 jobs in 2026 so far, and the year is not even two months old. Major companies including Amazon, Google, Meta, Microsoft, and dozens of mid-size enterprise software firms have all announced workforce reductions in the first quarter. The common thread: companies are reallocating resources away from roles they view as redundant or inefficient and toward AI-related capabilities.

Who Is Aneel Bhusri and What's His AI Vision?

Aneel Bhusri co-founded Workday in 2005 alongside Dave Duffield, the legendary enterprise software entrepreneur who also founded PeopleSoft. Bhusri served as Workday's CEO for nearly two decades, guiding the company from a small startup to one of the largest cloud-based enterprise software companies in the world, with annual revenues exceeding $7 billion. He stepped back from the CEO role in January 2024, handing the reins to Eschenbach, but remained involved with the company as a board member.

Now, Bhusri is stepping back into the CEO seat with a clear and ambitious mandate. In a statement announcing his return, Bhusri declared that "AI is a bigger transformation than SaaS — and it will define the next generation of market leaders." The statement is significant because it comes from someone who built one of the definitive SaaS companies of the past two decades. For Bhusri to characterize AI as an even larger shift than the cloud revolution that made Workday a market leader signals just how seriously the company's board takes the AI opportunity — and the AI threat.

The AI vision that Bhusri is bringing back to Workday appears to center on several key themes. First, Workday sits on an enormous dataset of HR, payroll, financial, and workforce planning data from thousands of the world's largest employers. That data is extraordinarily valuable for training AI models that can predict workforce trends, automate routine HR tasks, optimize compensation strategies, and streamline financial planning. Second, the enterprise software market is facing a generational disruption as AI-native competitors — many of them well-funded startups — threaten to erode the market positions of incumbents like Workday, SAP, and Oracle. Bhusri's return signals that Workday intends to be an AI leader rather than an AI laggard.

Industry analysts note that founder returns often carry a distinct energy and credibility that hired-gun CEOs struggle to replicate. When Howard Schultz returned to Starbucks, when Steve Jobs returned to Apple, and when Bob Iger returned to Disney, each brought a founder's clarity of vision and willingness to make bold bets. Whether Bhusri's return to Workday will follow the same pattern remains to be seen, but the early signals — a leadership change, workforce restructuring, and an aggressive AI narrative — suggest that significant changes are coming.

What Does This Mean for Workday Employees and Job Seekers?

For the roughly 375 employees directly affected by the February 2026 layoffs, the immediate priority is understanding their severance terms, benefits continuation, and timeline. Workday has not publicly disclosed the specific severance packages being offered to laid-off employees, but enterprise software companies of this size typically offer between 4 and 16 weeks of base salary depending on tenure, along with some period of continued health insurance coverage under COBRA subsidies.

For current Workday employees who were not affected by this round, the leadership transition creates both uncertainty and opportunity. The uncertainty comes from not knowing whether additional restructuring rounds are planned — back-to-back layoffs within 12 months often signal that more changes could follow. The opportunity comes from the AI pivot: employees who can position themselves in AI-related roles, data science, machine learning engineering, or AI product development may find themselves in higher demand internally as the company reallocates resources.

For job seekers in the broader tech market, the Workday layoffs reinforce several trends that have been building throughout 2025 and into 2026. First, customer-facing and support roles are increasingly vulnerable as companies look to automate these functions with AI tools. Second, enterprise software companies are prioritizing AI and automation capabilities over traditional expansion, which means the type of roles being hired for has shifted dramatically. Third, the tech job market remains competitive, with more than 38,400 positions eliminated industry-wide in 2026 alone, creating a large pool of experienced professionals competing for a more limited number of openings.

If you are a Workday employee who has been laid off, here are some immediate steps to consider. Update your LinkedIn profile and resume to highlight transferable skills, particularly any experience with enterprise software, cloud platforms, HR technology, or financial systems. Reach out to your professional network immediately — the first 48 hours after a layoff announcement are when sympathy and willingness to help are highest. File for unemployment benefits promptly, as processing times can vary by state. And begin researching companies that are actively hiring in the enterprise tech and AI sectors, as your domain expertise in HR and finance software is highly transferable.

The broader lesson from the Workday situation is one that applies across the tech industry right now: companies are restructuring not just to cut costs, but to fundamentally reposition themselves for an AI-driven future. Workers who invest in understanding AI tools, data literacy, and automation frameworks will be better positioned to weather the ongoing turbulence. Those who can demonstrate how they have used or contributed to AI initiatives will have a significant edge in the current job market.

People Also Asked

Q: Is Workday going through more layoffs in 2026? A: Yes. In February 2026, Workday confirmed a new round of layoffs affecting approximately 2% of its workforce, or roughly 375 employees. This comes on top of a much larger 8.5% reduction (about 1,750 positions) in February 2025. The company has not ruled out additional restructuring as it pivots toward an AI-first strategy under returning co-founder and CEO Aneel Bhusri. The cuts have been concentrated in non-revenue generating roles on customer-facing teams, particularly at the company's Pleasanton, California headquarters.

Q: Why did Workday's CEO Carl Eschenbach leave? A: Carl Eschenbach stepped down as Workday CEO in February 2026 after approximately 13 months in the role. While the company described the transition diplomatically, the departure followed a period of significant stock decline — roughly 40% over the past year — and decelerating revenue growth. Co-founder Aneel Bhusri returned to the CEO position, signaling that the board wanted a leader with deeper company roots and a clearer vision for navigating the AI transformation reshaping the enterprise software industry.

Q: What severance do laid-off Workday employees get? A: Workday has not publicly disclosed the specific severance terms for employees affected by the February 2026 layoffs. However, enterprise software companies of Workday's size typically offer between 4 and 16 weeks of base salary depending on tenure, along with some continuation of health benefits. By contrast, outgoing CEO Carl Eschenbach received a severance package worth more than $7 million, including a $3.6 million lump sum, $2.6 million in cash severance, a $941,000 bonus, and accelerated stock vesting.

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