Workday cuts 500 jobs as restructuring targets product and technology teams

Workday is cutting approximately 500 jobs, marking its second round of layoffs this year as the enterprise software provider restructures parts of its business and sharpens its focus on long-term growth priorities.

The company disclosed in a securities filing on September 29 that it will reduce around 2.5% of its workforce, with the cuts falling primarily within its Product and Technology teams. The move follows an earlier round of layoffs in February, when reports indicated that Workday eliminated roughly 400 positions.

According to the company, the latest restructuring is designed to better align team structures with strategic priorities while maintaining investment in selected growth areas.

Workforce reduction follows earlier cuts this year

In its filing, Workday said the workforce reduction will be accompanied by a reduction in certain leased office spaces as part of a broader restructuring effort.

The company stated that it plans to continue hiring in key strategic areas and locations throughout fiscal 2027 despite the latest job cuts.

Key details from the filing include:

• Approximately 2.5% of Workday's workforce will be reduced
• Layoffs will primarily affect Product and Technology teams
• The company will continue hiring in selected strategic functions and locations
• Certain leased office spaces will also be reduced as part of the restructuring
• Most restructuring costs will be recorded during the third quarter of fiscal 2027

As of July 31, 2026, Workday employed 20,896 people worldwide. Based on that headcount, the reduction could affect around 500 employees, according to reporting by Business Insider.

Product and technology functions face the largest impact

The layoffs are expected to fall most heavily on teams responsible for developing, maintaining and enhancing Workday's software products.

While the company identified Product and Technology as the primary areas affected, it did not disclose how many employees within those functions would lose their jobs.

The latest move comes as software companies continue to reassess organisational structures amid changing customer demands, evolving technology investments and increasing pressure to improve efficiency.

Workday has not linked either its February or September workforce reductions directly to artificial intelligence. Instead, the company has consistently framed the changes as part of organisational realignment and growth-focused restructuring.

AI reshapes conversations across the SaaS sector

The announcement arrives amid broader debate about how artificial intelligence could reshape the software-as-a-service industry.

Industry discussions have intensified as AI systems become increasingly capable of handling complex workflows, generating software code and completing multi-step tasks with limited human intervention.

Companies such as OpenAI and Anthropic have introduced tools capable of assisting developers with coding, software modification and automation tasks. While these technologies are not replacing enterprise software platforms, they have prompted questions about how traditional SaaS providers will evolve as AI capabilities advance.

Market uncertainty around these developments has contributed to volatility across software stocks during 2026, with some industry observers referring to the trend as the "SaaSpocalypse" following significant declines in valuations across parts of the sector.

Restructuring charges expected in fiscal 2027

Workday expects the restructuring programme to generate charges of between $65 million and $80 million.

According to the company, the costs will include:

• Severance and employee-related expenses
• Employee benefit obligations
• Costs associated with reducing leased office space

The majority of the charges are expected to be recognised during the third quarter of fiscal 2027, with the remainder recorded in the fourth quarter.

The latest workforce reduction signals continued operational adjustments at Workday as the company balances cost management, product development priorities and future growth investments in an increasingly competitive enterprise software market.