Workday to take $135M Q4 charges in restructuring

Workday, Inc. announced a reorganization that will eliminate approximately 2% of its current workforce, mainly non-revenue roles in Global Customer Operations, while continuing to hire in key strategic and revenue-generating areas for fiscal 2027.

Rhea-AI Filing Summary

Workday, Inc. announced a reorganization that will eliminate approximately 2% of its current workforce, mainly non-revenue roles in Global Customer Operations, while continuing to hire in key strategic and revenue-generating areas for fiscal 2027.

The company expects to record about $135 million in fiscal 2026 fourth quarter charges, including $40 million of cash severance and benefits, $15 million of non-cash stock-based compensation, and $80 million of non-cash impairment related to office space and long-lived assets.

Workday still expects fiscal 2026 fourth quarter and full-year results to be in line with prior guidance except for GAAP profitability. It now anticipates its GAAP operating margin to be 24–25 percentage points lower than non-GAAP in the fourth quarter and 22–23 percentage points lower for the full year, as it excludes these charges from non-GAAP metrics.

Positive

• Strategic realignment toward growth areas: Despite a 2% workforce reduction, Workday plans continued hiring in key strategic and revenue-generating roles in fiscal 2027, indicating an effort to prioritize resources toward higher-impact activities.

Negative

• Meaningful restructuring and impairment charges: Workday expects about $135 million in fourth quarter fiscal 2026 charges, including $80 million of non-cash impairments and $40 million of severance-related cash costs, materially pressuring near-term GAAP results.
• Large GAAP vs. non-GAAP margin gap: The company now anticipates its fiscal 2026 fourth quarter GAAP operating margin will be 24–25 percentage points below its non-GAAP margin, and 22–23 points lower for the full year, highlighting significant adjustments.

Insights

Equity analyst

Workday records $135M restructuring and impairment charges, widening its GAAP vs. non-GAAP margin gap.

Workday is undertaking a targeted reorganization, cutting about 2% of its workforce, mainly in non-revenue roles, while continuing to hire in strategic and revenue-generating areas. This suggests a shift in resource allocation toward future growth priorities heading into fiscal 2027.

The company expects approximately $135 million in total charges in the fiscal 2026 fourth quarter: $40 million cash for severance and related benefits, $15 million non-cash stock-based compensation, and $80 million non-cash impairment of office space and long-lived assets. These items significantly affect reported profitability under GAAP.

Management still expects overall fourth quarter and full-year fiscal 2026 results to align with prior guidance, but now forecasts GAAP operating margin to be 24–25% points below non-GAAP in the quarter and 22–23% points below non-GAAP for the year. Investors will likely focus on the February 24, 2026 earnings release for clarity on ongoing cost structure and how much of these actions improve operating efficiency beyond the one-time charges.

8-K Event Classification

3 items: 2.02, 2.05, 2.06

3 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 2.05 Costs Associated with Exit or Disposal Activities Financial

The company committed to an exit plan involving layoffs, facility closures, or restructuring charges.

Item 2.06 Material Impairments Financial

The company concluded that a material charge for impairment of assets (goodwill, intangibles, etc.) is required.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What restructuring actions did Workday (WDAY) announce in this 8-K?

Workday announced reorganizations in certain functions that will eliminate approximately 2% of its current workforce, mainly in non-revenue generating Global Customer Operations roles. The company still plans to keep hiring in fiscal 2027, focusing on key strategic and revenue-generating areas.

How much in restructuring and impairment charges will Workday (WDAY) record?

Workday expects approximately $135 million of charges in its fiscal 2026 fourth quarter. This includes $40 million of cash severance and benefits, $15 million of non-cash stock-based compensation, and $80 million of non-cash impairment related to certain office space and long-lived assets.

How will the reorganization affect Workday’s (WDAY) GAAP operating margin?

Workday now expects its fiscal 2026 fourth quarter GAAP operating margin to be 24–25 percentage points lower than its non-GAAP operating margin, and its full-year GAAP operating margin to be 22–23 percentage points lower than its full-year non-GAAP operating margin, primarily due to these charges.

Is Workday (WDAY) changing its overall fiscal 2026 guidance with this update?

Workday expects its fiscal 2026 fourth quarter and full-year financial results to remain in line with guidance given on November 25, 2025, except for GAAP operating margin. The margin will be lower because restructuring and impairment charges are excluded from non-GAAP measures.

When will Workday (WDAY) report its fiscal 2026 fourth quarter and full-year results?

Workday is scheduled to report its fiscal 2026 fourth quarter and full-year results on Tuesday, February 24, 2026. Those results will reflect the approximately $135 million in restructuring and impairment charges described in this 8-K filing.

When does Workday (WDAY) expect to complete the restructuring actions?

Workday expects the actions associated with the reorganization and related charges to be substantially completed by the first quarter of fiscal 2027. The company notes that timing and amounts may vary due to local law and consultation requirements in various jurisdictions.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 02/04/2026 - 04:04 PM Learn about SEC filing dates

0001327811FALSE00013278112026-01-302026-01-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): January 30, 2026

WORKDAY, INC.

(Exact name of registrant as specified in its charter)

Delaware			001-35680			20-2480422
(State or other jurisdiction of incorporation)			(Commission File Number)			(I.R.S. Employer Identification No.)

6110 Stoneridge Mall Road

Pleasanton, California 94588

(Address of principal executive offices)

Registrant’s telephone number, including area code: (925) 951-9000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Class A Common Stock, par value $0.001			WDAY			The Nasdaq Stock Market LLC
						(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 – Financial Information

Item 2.02 - Results of Operations and Financial Condition

Workday, Inc. (“Workday”) expects its fiscal 2026 fourth quarter and full-year financial results to be in-line with its guidance as provided on its fiscal 2026 third quarter earnings call on November 25, 2025, with the exception of its GAAP operating margin, due to the activities discussed in Items 2.05 and 2.06 below. Workday now expects its fiscal 2026 fourth quarter GAAP operating margin to be 24 to 25 percentage points lower than its fourth quarter non-GAAP operating margin and its fiscal 2026 full-year GAAP operating margin to be 22 to 23 percentage points lower than its full-year non-GAAP operating margin. Workday intends to exclude the charges associated with these activities from its non-GAAP financial measures.

These expectations are based on preliminary unaudited financial and other information, and subject to normal quarterly closing processes and accounting review. As previously announced, Workday is scheduled to report its fiscal 2026 fourth quarter and full-year financial results on Tuesday, February 24, 2026.

Item 2.05 - Costs Associated with Exit or Disposal Activities

On February 4, 2026, certain functions within Workday announced reorganizations designed to better align their people and resources to their highest priorities in fiscal 2027. These actions are expected to result in the elimination of approximately 2% of Workday’s current workforce, primarily in non-revenue generating roles within Workday’s Global Customer Operations team. Workday plans to continue to hire in key strategic areas and locations throughout its fiscal 2027, including additional revenue-generating areas to meet its market opportunity.

In connection with the above, Workday estimates that it will incur approximately $135 million in charges which are expected to be recognized in the fourth quarter of fiscal 2026, 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. The charges also consist of approximately $80 million in non-cash charges related to the impairment of certain office space and long-lived assets.

The actions described above are expected to be substantially completed by the first quarter of fiscal 2027, subject to local law and consultation requirements.

The estimates of the charges and expenditures that Workday expects to incur in connection with the above, and the timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates.

Item 2.06 – Material Impairments

The information contained in Item 2.05 above with respect to impairment charges related to certain office space and long-lived assets, as concluded by Workday on January 30, 2026, is incorporated herein by reference.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements including, but not limited to, statements related to the expected benefits and impact of the reorganizations, the expected hiring plans, the percentage of employees to be impacted, the estimate and timing of the charges that will be incurred, and Workday’s financial outlook for the fourth quarter and fiscal year ended January 31, 2026. These forward-looking statements are based only on currently available information and Workday’s current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of Workday’s control. If the risks materialize, assumptions prove incorrect, or Workday experiences unexpected changes in circumstances, actual results could differ materially from the results implied by these forward-looking statements, and therefore you should not rely on any forward-looking statements. Risks include, but are not limited to, the risk that we may not realize the anticipated benefits of the Plan to the extent or as quickly as anticipated or at all, the risk that the Plan costs and charges may be greater than anticipated, the risk that the Plan could negatively impact our business operations, as well as the risks described in Workday’s filings with the Securities and Exchange Commission (“SEC”), including Workday’s most recent report on Form 10-Q or Form 10-K and other reports that Workday has filed and will file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this report, except as required by law.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 4, 2026

Workday, Inc.

/s/ Zane Rowe

Zane Rowe

Chief Financial Officer