Workday co-founder returns as CEO amid steep share decline

By Alicia Tang and Brody Ford, Bloomberg

Workday Inc. announced co-founder Aneel Bhusri is returning to head the software company, replacing chief executive officer Carl Eschenbach after the company’s shares have plummeted over the past year.

The change is effective immediately, the company said in a statement Monday. Eschenbach is also stepping down as a member of the board. He will stay on as a strategic adviser to Bhusri, according to the statement.

The returning CEO will receive $135 million in stock awards, contingent on time and performance in the role, in addition to a $1.25 million base salary, according to a regulatory filing. The departing executive Eschenbach will receive a $3.6 million severance payment in addition to accelerated vesting of outstanding stock awards.

Bhusri co-founded Workday in 2005, serving as CEO from 2014 to 2020 and co-CEO from 2020 to 2024. Eschenbach was named co-CEO in late 2022 alongside Bhusri.

“We’re now entering one of the most pivotal moments in our history. AI is a bigger transformation than SaaS — and it will define the next generation of market leaders,” Bhusri said in a statement.

Shares of Workday fell as much as 9.6% after trading got underway in New York, touching their lowest level since November 2022. They were already down about 41% over the past 12 months.

Bhusri’s return to the helm is likely driven by the company’s steep stock decline over the last year, wrote Bloomberg Intelligence analyst Anurag Rana in a note. The co-founder’s return “could accelerate product development to infuse more AI tools across its platform,” Rana said.

Workday, which makes software for business tasks such as managing personnel, is among a cohort of application software leaders which have struggled to keep the faith of Wall Street in the artificial intelligence era. Under Eschenbach, the company signaled a new focus on profitability, announcing job cuts and saying it would use AI to streamline its own operations.

Last week, Workday announced it would shed about about 400 employees, or roughly 2% of its workforce, saying it will help the company better invest in priority areas. The company had about 20,600 workers at the end of October, according to a filing.

Still, the executive swap will “damage investor confidence in terms of strategy and direction,” wrote Jordan Klein, an analyst at Mizuho. Eschenbach was hired to expand Workday’s presence beyond core human resources software and had a solid reputation, Klein wrote.

(Updates with link to regulatory filing in the third paragraph.)

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