Workday said Monday that co-founder Aneel Bhusri is resuming the chief executive officer position with immediate effect, replacing Carl Eschenbach who is departing the role after a three-year tenure. Eschenbach will also vacate his seat on the company’s board of directors and transition to a strategic advisor capacity, the company said.
The leadership change arrives against a difficult backdrop for the enterprise software company. Shares have slid about 40% over the past 12 months and are trading close to their 52-week low of $156.87, reflecting investor concern even as management takes steps to reposition the business for a computing environment shaped by artificial intelligence.
In commentary accompanying the personnel shift, third-party research notes underscore the company’s standing in software markets and management actions under way. According to InvestingPro, Workday remains a notable participant in the Software industry and management has continued repurchasing shares despite recent headwinds.
Analysts were quick to weigh in following the announcement. Needham left its Buy rating intact and kept a $300.00 price target, framing the leadership return as being "more driven by the need to move faster on the product side in the new AI-driven paradigm" rather than as an indictment of sales execution. That $300 target represents considerable upside relative to current prices, and InvestingPro data indicates the stock is trading below its Fair Value estimate.
Other broker reactions were mixed. Stifel reduced its price target to $175 and maintained a Hold rating, explicitly citing the CEO change as a factor. Oppenheimer held to an Outperform rating with a $270 price objective despite the abrupt executive transition. Evercore ISI cut its target to $200 from $300, pointing to concerns about Workday’s growth and referencing what it characterized as a "leaky bucket" issue.
Workday also confirmed that its fourth-quarter financial results will be consistent with previous guidance, excluding the effect of a restructuring charge that will reduce GAAP operating income. The company did not provide quantitative details about that charge in the announcement.
Timing for the leadership handoff coincides with the start of a new fiscal year. Needham pointed to that timing as supporting its early checks suggesting an "in line or muted" sales period for the company in the fourth quarter across its human resources and financial management software business.
The executive change and mixed analyst responses come as Workday prepares for an upcoming earnings call and seeks to navigate shifting customer and product dynamics tied to artificial intelligence. Management actions, including share buybacks and the acknowledged restructuring charge, will be watched closely by investors for clues about the company’s near-term priorities and financial flexibility.
Contextual note: The company’s announcement made clear the leadership move is effective immediately and that further details on the restructuring charge were not provided in the release.