Workday Stock Plummets Following Sudden Return of Founder to CEO Role

In a move that caught investors off guard, Workday announced an immediate leadership shakeup yesterday, sending its shares tumbling. Co-founder Aneel Bhusri has reassumed the chief executive officer position, replacing Carl Eschenbach, who is departing the company after approximately two years at the helm. The abrupt timing of the change, coming just days before the company's quarterly earnings release, triggered a sharp sell-off in the stock.

The announcement that Carl Eschenbach was stepping down from his roles as sole CEO and board member, effective immediately, introduced significant uncertainty. While he will remain with Workday in an advisory capacity, the proximity of the change to the earnings report raised eyebrows among analysts. The company stated the decision was not related to any accounting disagreements, but the market treated the news as a potential red flag.

Workday's equity fell more than 6% following the news, pushing its value toward levels last seen near its 52-week low. Market strategists often interpret such sudden executive rotations immediately preceding financial disclosures as a signal of underlying volatility or unexpected challenges.

Should investors sell immediately? Or is it worth buying Workday?

Restructuring and Confirmed Outlook Amid Leadership Shift

Despite the leadership turmoil, Workday confirmed its previously stated financial targets for both its fourth quarter and the full fiscal year 2026 remain unchanged. This provided a minor stabilizing element to the narrative.

Concurrently, the company is moving forward with a broader restructuring plan. Approximately 400 positions, representing nearly 2% of its global workforce, are being eliminated. This marks the second round of job cuts within a year and appears focused on non-revenue-generating departments such as customer support and general operations. Management indicated the savings will be redirected toward accelerating investments in artificial intelligence and automation, underscoring a heightened focus on improving operational efficiency and margins.

All Eyes on the Upcoming Earnings Call

The detailed strategic rationale behind bringing Aneel Bhusri back to lead the company's "next phase of growth" is expected to be a central topic during Workday's upcoming earnings presentation. The provider of enterprise cloud software will release its comprehensive financial report for Q4 and fiscal 2026 after U.S. markets close on February 24.

• Leadership Change: Aneel Bhusri returns as CEO, replacing Carl Eschenbach.
• Financial Guidance: Full-year and Q4 fiscal 2026 targets are reaffirmed.
• Workforce Reduction: About 400 roles are being cut as part of a restructuring.
• Earnings Date: Detailed quarterly results are scheduled for February 24.