Workday has announced plans to cut around 1,750 jobs, or 8.5% of its workforce, as it shifts focus towards AI and international expansion. CEO Carl Eschenbach said the layoffs would help prioritise investments in AI while also freeing up resources to strengthen the company's presence in different markets. Shares of the California-based human capital management firm rose over 4% in premarket trading following the announcement.

The industry has faced a slowdown in enterprise spending due to high interest rates affecting tech budgets. Workday expects to incur charges of up to$270 million related to the job cuts, with$60 million to$70 million recognised in the fourth quarter. The company, which had around 18,800 employees as of January last year, also plans to close some of its office spaces as part of its cost-cutting strategy.

Workday faces growing competition in the human capital management sector as rivals consolidate through acquisitions. Recent deals include Paychex's$4.1 billion purchase of Paycor and ADP's$1.2 billion acquisition of WorkForce Software. Despite the job cuts, Workday reaffirmed that its financial performance remains on track, with annual subscription revenue expected to reach$7.70 billion and fourth-quarter revenue forecasted at$2.03 billion.