Workday, a company specializing in finance and human resources software, is planning to lay off 1,750 employees, which represents a reduction of 8.5% of its total workforce.

Carl Eschenbach, the CEO of Workday, communicated to employees on Wednesday that the extensive job cuts were a “challenging, yet necessary decision.” The goal is to refocus resources to support the company’s global growth and meet the increasing demand for artificial intelligence.

“I understand this is hard news for everyone—those leaving and those who will remain. I suggest that you consider working from home or heading home if you’re already at the office,” Eschenbach conveyed.

Employees impacted by the layoffs will be notified soon, as Eschenbach mentioned that the company hopes to meet with as many affected individuals as possible on Wednesday. He clarified that the termination process may differ by department due to local regulations requiring consultation periods.

As of the end of October, Workday had more than 20,400 employees, according to Bloomberg reports. Previously, it had been one of the few major tech companies that did not engage in widespread layoffs in recent years.

U.S. employees guaranteed a minimum of 12 weeks pay

Employees in the United States will receive at least 12 weeks of severance pay, with additional weeks offered based on length of service, Eschenbach stated. They will also receive “extra vesting of restricted stock unit grants, career transition services, support for benefits, and immigration assistance.”

Employees outside the U.S. will receive similar aid packages as allowed by local laws, according to Eschenbach.

“To those departing, I sincerely thank you for your hard work, commitment, and the significant impact you’ve had on Workday’s journey,” he expressed. “We are dedicated to providing resources to assist you during this transition.”

Focus on AI and global growth

In his Wednesday communication, Eschenbach outlined additional strategies for reshaping Workday, emphasizing the importance of investing in innovation, particularly in artificial intelligence, platform development, and opportunities to analyze return on investment throughout the organization.

“We see immense potential ahead, especially in AI, and we have a solid foundation to build on,” he remarked. “Although we have work to do to achieve our vision and potential, today’s focus is on ensuring we support one another. I am thankful for how you uplift each other, as well as our customers and partners—especially during challenging times.”

He also highlighted the necessity of broadening Workday’s global reach by “investing in strategic locations with skilled talent.” Other objectives he mentioned include accelerating decision-making processes, enhancing innovation, and clarifying roles and responsibilities.