Workday talks up AI agent amid staff cuts

Workday has confirmed that AI did indeed cost the job of colleagues that are leaving the organization following a restructuring plan cooked up by executive head chef Carl Eschenbach. How so? The money the org expects to save will be ploughed into its Agent System of Record platform.

The HR and finance SaaS application biz said earlier this month that it was erasing 8.5 percent of the workforce, impacting around 1,750 people. Workday said it plans to hire in "strategic positions," as the commercial climate "demands a new approach".

During an earnings call to discuss the latest financial results yesterday, CEO Eschenbach said it is essential for Workday to be "able to invest back in" any money saved on staffing costs "specifically into the product and technology organization around our Agent System of Record."

The platform – designed to securely onboard and manage an org's AI agents – was released a fortnight ago, and the exec says there's been a surge in interest from customers and other tech vendors it has allied with, including IBM, Google Cloud, and Salesforce.

Customers "who want to build agents," he said, "understand there is a risk of them entering the enterprise in an uncontrolled way."

"So, there's no doubt this investment is required because of the demand we're seeing. It's also required on the go-to-market side, where we're going to continue to invest to be able to take the Agent System of Record along with all of our role-based agents deeper into the enterprise."

The cost of the restructuring expenses is estimated at up to $270 million in total, both in terms of cash expenditure and non-cash charges. Workday hasn't said what it expects to save.

Workday has itself launched role-base agents including for contracts, payroll, financial auditing and policy. "These are not task-based agents like most of the market today. Our role-based agents contain a configurable set of skills that give them greater ability to support people in their roles," said Eschenbach.

Each of these agent can perform a number of tasks and this, he assured analysts on the earnings call, is where the "true ROI" resides and "where we see that customers are willing to pay.

"Over the past year, hundreds and maybe thousands of agents have been introduced into the market across a number of vendors. As more agents are deployed, organizations risk fragmented operations, increased security risks, and difficulty measuring the true value of their AI investments."

This is where the Agent System of Record platform comes into play:

"At this point, there's no central place to manage agents, and there is a real risk of sprawl. That's what the Workday Agent System of Record aims to solve. It will manage a business' entire fleet of AI agents alongside their human workforce, all on a trusted platform. And it won't just manage Workday agents."

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So while AI may not yet be taking over as many jobs as previously feared by some, according to the Bureau of Labor Statistics this week, it has certainly cost those 1,750 jobs at Workday.

As for the corporation's fiscal 2025, which ended January 31, Workday reported revenue of $8.44 billion, up 16.4 percent year-on-year, including a $7.71 billion contribution from subscriptions, and operating profit of $415 million, up from $183 million. ®