Workday on Monday announced a leadership change, with co-founder Aneel Bhusri returning as CEO effective immediately following the departure of Carl Eschenbach, who had led the company for three years. The move comes amid a steep decline in Workday’s stock, which is down more than 20% this year, as investors reassess traditional SaaS companies in the face of rapid advances in AI.
Bhusri, who helped found Workday in 2005, is one of the company’s longest-serving leaders. He previously served as co-CEO from 2009 to 2014, then as sole CEO until 2020, before again sharing the role with Eschenbach starting in 2022. Most recently, Bhusri had been executive chair. Workday said Eschenbach stepped down from the CEO role on Monday.
The timing underscores mounting pressure on enterprise software companies as AI reshapes customer expectations and investor sentiment. Workday shares fell another 5% on the news, extending a selloff that has hit much of the SaaS sector. Investors have grown increasingly wary that AI-driven platforms could disrupt established software models, particularly for companies built around long-term subscription contracts.
In a statement, Bhusri described the moment as “one of the most pivotal” in Workday’s history, pointing to AI as a larger shift than the move to SaaS itself. His return signals the board’s view that founder leadership is needed as the company works to reposition itself for the next phase of enterprise software.
Eschenbach had publicly downplayed fears of AI-driven disruption as recently as last month, telling CNBC that concerns about AI upending the software industry were “overblown.” Workday’s stock performance suggests investors were unconvinced. The company has underperformed peers such as Microsoft, Salesforce, and Oracle, which have moved more aggressively to market AI features across their enterprise offerings.
Workday has already taken steps to reallocate resources toward AI. Last year, the company cut roughly 1,750 jobs, or about 10% of its workforce, in part to fund increased investment in AI development. Still, analysts and investors are looking for clearer evidence that those investments will translate into products customers are willing to pay for, rather than features that erode existing subscription revenue.
Eschenbach, in his departure statement, pointed to progress on operational discipline, global expansion, and early AI groundwork. But with investor patience wearing thin, the board appears to have concluded that Workday needs clearer strategic direction at a time when enterprise buyers are reassessing how AI fits into core HR and finance systems.
Bhusri now faces the challenge of leading a company very different from the one he originally built. Workday rose to prominence by helping enterprises move HR and financial management systems to the cloud. Today, customers are increasingly expecting those platforms to incorporate predictive and generative AI capabilities, while competitors and startups push AI-native alternatives.
How Bhusri articulates Workday’s AI strategy—and how quickly it translates into revenue growth—will be closely watched, starting with the company’s next earnings report. For now, his return reflects a broader reality across enterprise software: as AI reshapes the market, boards are turning to founders to steer companies through periods of structural change rather than incremental evolution.
This analysis is based on reporting from techbuzz.
Image courtesy of Workday.
This article was generated with AI assistance and reviewed for accuracy and quality.
