Workday CEO Carl Eschenbach firmly pushed back against the prevailing narrative that artificial intelligence poses an existential threat to software business models, particularly those reliant on recurring revenue. Speaking from the World Economic Forum in Davos, Eschenbach characterized AI not as a disruptive headwind, but as a significant tailwind for Workday.
The software sector has experienced considerable volatility, with many companies seeing their valuations contract amid concerns that advanced AI tools could erode established business structures. This anxiety has been particularly acute for companies like Workday, which saw its shares decline by 17% last year and an additional 15% entering 2026. These concerns were further amplified by a lackluster subscription revenue forecast in Workday’s third-quarter earnings report, which led to investor apprehension.
This market sentiment has impacted peers as well. Adobe experienced a 21% dip in its stock value over the past year, while Salesforce saw a similar decline. HubSpot faced an even steeper downturn, plummeting over 40%.
Eschenbach, however, emphasized Workday’s strategic positioning, highlighting that businesses are increasingly seeking integrated AI solutions and are prioritizing the use of first-party data. This approach allows Workday to develop and deploy AI capabilities that are directly relevant to its existing customer base, differentiating it from the proliferation of third-party AI tools. Many software firms are indeed accelerating investments in AI to bolster their platforms and proactively address competitive pressures.
In line with this strategic pivot, Workday implemented workforce adjustments last year, with approximately 1,750 roles being cut to reallocate resources towards AI development. This mirrors industry-wide trends, such as ServiceNow’s recent three-year partnership with OpenAI to enhance its AI offerings.
“We are uniquely positioned to be one of the AI winners in the enterprise,” Eschenbach stated, attributing this advantage to Workday’s established presence, deep customer relationships, and the inherent trust it has cultivated. This strategic focus on leveraging its core strengths positions Workday to navigate and capitalize on the evolving AI landscape.
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