Workday, a significant IT business, has announced large-scale layoffs. They are letting go of 1,750 workers in all. The Bay Area is home to 617 of them. A filing with the Securities and Exchange Commission (SEC) affirmed the judgment.
Large-Scale Workforce Reduction
The layoffs account for 8.5% of Workday’s staff. After the cuts, the company’s workforce will drop to around 18,840 employees. They described the move as part of a strategic shift. CEO Carl Eschenbach sent a letter to employees on Wednesday.
Impact on the Bay Area
The majority of the layoffs are in Pleasanton. Workday’s headquarters on Stoneridge Mall Road will see major cuts. Other locations may also be affected, but they did not disclose specific details.
Focus on AI Investment
The company is looking to invest more in artificial intelligence (AI). AI has the ability to propel future prosperity, Eschenbach said. We’ll keep hiring in strategic areas. But to reallocate resources, they are removing certain positions.
Financial Consequences
The cost of the layoffs is high. They anticipate that severance costs will fall between $145 million and $175 million. In the United States, they will compensate affected workers for a minimum of 12 weeks. Supporting employees during the change is the aim.
Changes to the Office Space
Workday may lessen its office space as well. The SEC filing stated plans to leave certain owned premises. He assured workers that the business is strong. The corporation has not disclosed which specific offices it will impact..
Statement from the CEO
Eschenbach admitted that the situation was challenging. He assured workers that the business is well-founded. Long-term growth and AI innovation will be the main topics.
The layoffs at Workday are part of a larger trend in the IT sector. Other businesses have made similar choices to reorganize and adjust to new technology.
