"Workday is laying off about two percent of its staff in a bid to align its people with its "highest priorities," but at a significant cost to its margins for the quarter and the year, the company announced on Wednesday. The SaaS-y HR vendor said most of the cuts will be to non-revenue generating roles in its Global Customer Operations team."
""Workday estimates that it will incur approximately $135 million in charges ... consisting of approximately $40 million of future cash expenditures related to severance payments, employee benefits, and related costs and approximately $15 million in non-cash charges for stock-based compensation," according to the regulatory filing. "The charges also consist of approximately $80 million in non-cash charges related to the impairment of certain office space and long-lived assets.""
"During its last earnings call in November, Workday said it was executing well against its efficiency goals and expects quarterly GAAP operating margins to come in at 9.5 percent and fiscal year GAAP margins to arrive at eight percent. Workday said it now expects GAAP operating margins to be 24 to 25 percentage points lower for the quarter and 22 to 23 percentage points lower for its full financial year."
Workday is reducing workforce by roughly two percent, concentrating cuts in non-revenue Global Customer Operations roles and potentially affecting about 400 jobs. The company estimates approximately $135 million in charges tied to the layoffs, including about $40 million of future cash severance and benefits, $15 million of non-cash stock-based compensation charges, and roughly $80 million of non-cash impairments of office space and long-lived assets. These costs will materially depress GAAP operating margins, shifting prior quarterly and fiscal-year margin expectations down by roughly 24–25 and 22–23 percentage points respectively. The global workforce stood at over 20,400 employees across 34 countries.
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