Workday Cuts 2.5% of Workforce and Lowers GAAP Margin Outlook
WDAY sits 71% above its 52-week low of $110.36.
Summary
Workday is reducing its workforce by 2.5% and cutting office space, incurring $65M–$80M in charges, while lowering GAAP operating margin guidance for Q3 and full-year FY27. Workday reiterated its fiscal third-quarter and full-year guidance. The layoffs are expected to be completed by the first quarter of the next fiscal year, and the lease reductions by the fourth quarter.
Updated with a Dow Jones Newswires report · What changed
Updates
· Dow Jones Newswires — Workday reiterated its fiscal third-quarter and full-year guidance.
- Layoffs are expected to be completed by the first quarter of the next fiscal year.
- Lease reductions are set to be completed by the fourth quarter.
Key Events · Earnings and Guidance · WDAY
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New · · Dow Jones Newswires
Guidance Reiterated
Workday reiterated its fiscal third-quarter and full-year guidance.
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Updated · · Dow Jones Newswires
2.5% Workforce Reduction
Approximately 2.5% of the workforce, primarily in Product and Technology, is being cut to align team structures with strategic growth priorities. Layoffs are expected to be completed by the first quarter of the next fiscal year.
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Updated · · Dow Jones Newswires
Office Space Reductions
Select leased office space reductions will result in approximately $15M in non-cash impairment charges. Lease reductions are set to be completed by the fourth quarter.
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$65M-$80M Restructuring Charges
Total charges are estimated at $65M to $80M, with $55M to $70M in Q3 FY27 and $10M in Q4 FY27, including $40M-$55M in cash severance costs.
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GAAP Margin Guidance Cut
Q3 GAAP operating margin is now expected to be 20-21 percentage points lower than non-GAAP, and full-year GAAP margin 19 points lower, due to restructuring charges.
Analysis · WDAY · Technology
A restructuring of Product and Technology teams will reduce the workforce by approximately 2.5% and trim leased office space. Charges are expected to land between $65M and $80M, with the majority hitting Q3 FY27. The move comes as Silver Lake pursues take-private discussions, hinting that Workday is streamlining operations ahead of a possible acquisition. Reflecting these costs, GAAP operating margin guidance is being cut by 19–21 percentage points, though non-GAAP measures exclude the charges. Workday reiterated its fiscal third-quarter and full-year guidance. The layoffs are expected to be completed by the first quarter of the next fiscal year, and the lease reductions by the fourth quarter.
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At the time of this filing, WDAY was trading at $189.17 on NASDAQ in the Technology sector, with a market capitalization of approximately $45.6B. The 52-week trading range was $110.36 to $249.85. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.