Workday stock climbed after the enterprise software maker announced a restructuring that will reduce its workforce by 8.5%, or 1,750 employees. The company said it expects fourth quarter financial results to be in line with, or above, guidance for Workday stock.
The restructuring will be largely complete by the second quarter of fiscal 2026, the company said. Also, the Pleasanton, Calif.-based company will take in a range of $230 million to $270 million of associated charges in Q4 and fiscal Q1 of 2026.
Workday said it plans to continue hiring in key strategic areas, such as artificial intelligence and international expansion.
Workday Stock: Analyst Views
"The news shows further shift toward balance between driving margin and growth as the business matures, which we think should be supportive for shares over the medium term," said Daniel Jester, analyst at BMO Capital Markets, in a report.
At William Blair, analyst Jake Roberge said in a report: "While these layoffs are unfortunate, we believe the restructuring plan makes sense given Workday's moderating growth profile and increased focus on profitability. Moving forward, the company intends to continue hiring in areas to drive AI adoption and strategic geographic expansion."
On the stock market today, Workday stock climbed nearly 6% to 274.50 in early trading.
In November, the enterprise software maker's fiscal 2026 subscription revenue guidance missed expectations.
The company sells software for human resources management, such as payroll tools. About 70% of revenue comes from human capital management products. Also, it has expanded into financial software.
As of the market open on Wednesday, Workday stock was about flat in 2025. Shares have retreated about 11% over the past 52 weeks.
Also, WDAY stock holds a Relative Strength Rating of 61 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
