Workday's stock has been in a slump. Its CEO is leaning into agentic AI.

Workday is positioning itself at the forefront of the artificial intelligence revolution, anticipating that AI will take on more responsibilities in the workplace. Despite a recent downturn in software stocks, including its own, the company presented AI as a significant growth avenue during its earnings call on Tuesday. CEO Anil Bhusri emphasized, "We're working really hard to figure out how to enhance business process execution for our customers while reducing costs." He further explored the concept of an 'agentic model,' questioning how AI agents might substitute for human labor. Bhusri acknowledged the need to address the implications for human workers who may be displaced by these advancements. In the financial results for the quarter ending in January, Workday reported both revenue and net-income growth. However, its shares experienced a drop of around 10% after the company forecasted slower subscription revenue growth than analysts had anticipated for the upcoming fiscal year. A spokesperson clarified that Bhusri's comments were not indicative of plans to replace employees but rather reflected broader industry trends. Bhusri noted that the AI initiatives Workday is developing are not expected to yield substantial revenue until later in the year. The company’s stock decline represents yet another challenge in a broader software market downturn, which has been triggered by fears surrounding AI's disruptive capabilities. This selloff began in early February, leading to a significant decline in stock prices across the sector, impacting firms like LegalZoom, Thomson Reuters, and Okta. During the earnings call, Workday refrained from directly addressing market concerns but highlighted its commitment to investing in agentic products aimed at expanding its presence in HR and finance software. Earlier this month, the company announced it would be laying off about 400 employees to better align its resources with its strategic priorities. Shortly after, Bhusri was reinstated as CEO, succeeding Carl Eschenbach, who resigned. Bhusri has previously held the CEO position three times and expressed a cautious yet optimistic approach towards the company's future, stating, "I tend to set guidance conservatively and aim to outperform it."