Did Workday announce layoffs in February 2026?

Yes, Workday announced approximately 2% workforce reduction on February 4, 2026, primarily affecting non-revenue generating roles in Global Customer Operations. This follows the larger 8.5% workforce cut announced in February 2025.

Is Workday still on track for Q4 2026 earnings?

Yes, Workday reaffirmed that Q4 and full-year FY2026 results are expected to be in-line with prior guidance from November 2025, with the exception of GAAP operating margin due to restructuring charges.

When is Workday's Q4 2026 earnings date?

Workday is scheduled to report Q4 FY2026 and full-year results on Tuesday, February 24, 2026.

Workday (WDAY)·Q4 2026 Earnings Summary

Workday Announces 2% Workforce Cut, Stock Jumps 6% Ahead of Q4 Results

February 4, 2026 · by Fintool AI Agent

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Workday filed an 8-K today announcing a targeted restructuring that will eliminate approximately 2% of its workforce—primarily in non-revenue generating roles within its Global Customer Operations team . The stock jumped 5.6% to close at $170.15, its best single-day performance in months, as investors interpreted the move as a sign of cost discipline ahead of Q4 results.

What Did Workday Announce?

The restructuring announced on February 4, 2026, includes three components totaling $135 million in charges:

Component	Amount	Type	Description
Severance & Benefits	$40M	Cash	Employee separation costs
Stock-Based Compensation	$15M	Non-cash	Accelerated vesting
Asset Impairment	$80M	Non-cash	Office space and long-lived assets
Total	$135M

The company emphasized it plans to "continue to hire in key strategic areas and locations throughout fiscal 2027, including additional revenue-generating areas to meet its market opportunity" . Actions are expected to be substantially complete by Q1 FY2027.

Restructuring Breakdown

Is This Related to the 2025 Layoffs?

This is a smaller, more targeted action compared to the major restructuring Workday announced in February 2025, when the company cut 1,750 jobs (8.5% of workforce) with charges of $230-$270 million . That earlier restructuring was framed around AI investment prioritization and global footprint expansion .

Today's announcement appears to be a continuation of the operational streamlining, focusing specifically on non-revenue generating functions.

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Did Workday Provide Guidance Updates?

Workday reaffirmed that Q4 and full-year FY2026 results are expected to be "in-line with guidance" from the November 25, 2025 earnings call . However, GAAP operating margins will be significantly impacted:

Metric	Impact
Q4 GAAP Operating Margin	24-25 pts below non-GAAP
FY26 GAAP Operating Margin	22-23 pts below non-GAAP

For reference, here's what management guided in November for Q4:

Metric	Q4 FY2026 Guidance
Subscription Revenue	$2.355B (15% growth)
Non-GAAP Operating Margin	At least 28.5%
CRPO Growth	15-16%

Full-year FY2026 guidance called for subscription revenue of $8.828B and approximately 29% non-GAAP operating margin .

What's Workday's Beat/Miss Track Record?

Workday has beaten both revenue and EPS estimates for 8 consecutive quarters—despite the stock falling 35% over the past year:

Period	Revenue	Rev Est	Beat	EPS	EPS Est	Beat
Q4 2024	$1,922M	$1,917M	+0.3%	$1.57	$1.47	+7.0%
Q1 2025	$1,990M	$1,973M	+0.8%	$1.74	$1.58	+10.1%
Q2 2025	$2,085M	$2,072M	+0.6%	$1.75	$1.65	+6.0%
Q3 2025	$2,160M	$2,131M	+1.4%	$1.89	$1.76	+7.5%
Q4 2025	$2,211M	$2,182M	+1.3%	$1.92	$1.78	+8.1%
Q1 2026	$2,240M	$2,217M	+1.0%	$2.23	$2.01	+11.0%
Q2 2026	$2,348M	$2,341M	+0.3%	$2.21	$2.12	+4.4%
Q3 2026	$2,432M	$2,417M	+0.6%	$2.32	$2.17	+6.7%

Revenue and EPS actuals and estimates retrieved from S&P Global

How Did the Stock React?

WDAY surged 5.6% on the announcement:

Metric	Value
Close Price	$170.15
Daily Change	+$8.98 (+5.6%)
Intraday Range	$156.87 - $170.44
Volume	6.35M shares
YTD Performance	-17.3%
1-Year Performance	-34.5%

The positive reaction suggests investors view the restructuring as evidence of margin discipline rather than weakness. The stock had been trading near 52-week lows ($156.87 was hit today before reversing).

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What Are the Financial Trends?

Workday has shown consistent revenue growth and margin expansion:

Metric	Q1 2025	Q2 2025	Q3 2025	Q4 2025	Q1 2026	Q2 2026	Q3 2026
Revenue	$1,990M	$2,085M	$2,160M	$2,211M	$2,240M	$2,348M	$2,432M
EBIT Margin	3.6%*	5.4%*	7.6%*	7.2%*	9.2%*	10.6%*	10.9%*
Net Income	$107M	$132M	$193M	$94M	$68M	$228M	$252M

Values retrieved from S&P Global

Operating margins have more than tripled from 3.6% in Q1 2025 to 10.9% in Q3 2026, demonstrating the company's progress on profitability despite top-line deceleration.

What's the Outlook?

Consensus estimates for upcoming periods:

Metric	Q4 2026	FY 2026	FY 2027
Revenue Consensus	$2.52B*	$9.54B*	$10.72B*
EPS Consensus	$2.32*	$9.11*	$10.73*

Values retrieved from S&P Global

Management previously guided to a subscription revenue CAGR of 12-15% through FY28 and approximately 13% subscription revenue growth for FY27 .

When Are Full Q4 Results?

Workday is scheduled to report fiscal 2026 fourth quarter and full-year results on Tuesday, February 24, 2026 .

Key items to watch:

Subscription revenue vs. $2.355B guidance
Non-GAAP operating margin vs. 28.5% guidance
CRPO growth vs. 15-16% guidance
FY27 guidance details
DIA contract phase 1 completion (~$15M contribution)

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