Workday is betting that artificial intelligence will take over more jobs.
Software stocks, including Workday, have fallen recently on concerns about advances in AI, but the company positioned the technology as a growth opportunity on Tuesday’s earnings call.
CEO Anil Bhusri said, “We are working hard to figure out how we can improve the execution of our customers’ business processes at a lower cost.”
“I think that’s where the agent model fits in. What can agents do to replace human labor?” he said. “And obviously in the long term, we have to think about what to do with the people who are displaced.”
Mr. Busri’s statement has arrived. After Workday reported revenue and net income growth for the quarter ended January. However, the company expects subscription revenue growth in the coming fiscal year to be slower than Wall Street expected, sending the stock down about 10%.
A Workday spokesperson said Bhusri’s comments were not about Workday employees or its customers’ workforce replacement plans, but rather about industry-level changes.
Bhusri said the outlook reflects that the AI products Workday is developing are not expected to generate meaningful revenue until later this year.
The fall in Workday’s stock represents another setback for the company, which has seen its share price fall in recent weeks as concerns that artificial intelligence could upend the industry led to sell-offs across software.
The sell-off began in early February and sent the sector into a deep bear market that spilled over into adjacent industries as investors grappled with the disruptive potential of AI. Other companies affected include LegalZoom, Thomson Reuters, and Okta.
During the call, Workday did not directly address those concerns, instead emphasizing its investment in Agent products to expand its reach in the human resources and finance software space.
Earlier this month, Workday announced it would lay off about 400 employees, saying it needed to realign resources to achieve its top priorities. A week later, Boursi was named CEO, replacing Carl Eschenbach, who resigned.
Bhusri has held the top position three times so far. He told analysts on Tuesday’s earnings call that he was optimistic about the business but would tend to set cautious guidance and aim to outperform it.
“I don’t know if you remember when I was a CEO before, but I’m conservative with guidelines and I try to break them,” he said.
