Founder-Led Rescue Mission Signals Desperation in Software Sector
Workday has executed Silicon Valley's most time-honoured crisis playbook: bringing back the founder. Aneel Bhusri, who co-founded the human resources software company in 2005, has reclaimed the CEO position he vacated just two years ago, replacing Carl Eschenbach in what appears to be a forced departure. The leadership shake-up comes as Workday's market capitalisation has been slashed in half from its £62 billion peak, with the company shedding roughly £31 billion in value as investors flee enterprise software stocks.
The timing reveals the severity of the crisis facing software-as-a-service companies. Bhusri's compensation package—valued at £107 million (approximately $138.8 million)—includes £58 million in performance-based stock that only pays out if he hits undisclosed stock price targets over five years. The remaining £46 million in restricted stock requires merely that Bhusri remain at the company for four years, with no performance requirements whatsoever. This structure suggests Workday's board recognises that simply preventing further collapse may be achievement enough.
Bhusri's personal fortune has taken a devastating hit during his tenure as executive chair. His ownership stake, comprising more than 8 million shares, plummeted from £2 billion in 2024 to approximately £1 billion today—a paper loss of roughly £1 billion in less than two years. With his wealth and legacy on the line, Bhusri now controls both operational authority as CEO and 68% of voting power through a dual-class share structure he shares with co-founder Dave Duffield.
AI Disruption Triggers Bloodbath Across Enterprise Software
The catalyst for Workday's decline extends far beyond company-specific challenges. Anthropic's recent launch of Claude Cowork plugins has sent shockwaves through the enterprise software sector, with investors suddenly questioning whether traditional SaaS companies can survive the AI revolution. These plugins enable businesses to automate entire workflows that previously required human employees—directly threatening companies like Workday that charge based on the number of user seats.
The market carnage has been indiscriminate. Salesforce, ServiceNow, and HubSpot have all suffered double-digit stock price declines as investors reassess the fundamental value proposition of software that AI agents might soon replicate at a fraction of the cost. Workday's shares have fallen 51% from an intraday peak of £241 ($311.28) to approximately £116 ($150), with a 29% decline in 2026 alone. The day Bhusri's return was announced, the stock dropped more than 6%, underscoring investor scepticism that even a founder-saviour can navigate these treacherous waters.
Workday's financial performance tells a story of a company struggling to maintain momentum. While revenue reached £6.5 billion ($8.4 billion) in fiscal 2025—representing 16% growth—subscription revenue growth has decelerated from 19% in fiscal 2024 to 17% in fiscal 2025, with the most recent quarter showing just 15%. This slowdown occurs even as the company has slashed costs through multiple restructuring rounds, including a 7.5% workforce reduction in February 2025 that resulted in £133 million ($172 million) in charges.
Repeated Layoffs Expose Deeper Structural Problems
Just days before announcing Bhusri's return, Workday disclosed plans to eliminate approximately 400 positions—roughly 2% of its workforce—primarily targeting non-revenue-generating roles within its Global Customer Operations team. The cuts will cost the company approximately £104 million ($135 million) in restructuring charges, including £31 million ($40 million) in severance and benefits. This marks Workday's second major workforce reduction in 12 months, following the elimination of 1,750 positions in February 2025.
The company frames these cuts as "realigning resources" to focus on strategic priorities, particularly AI development. However, the pattern of repeated restructurings suggests Workday is struggling to identify a sustainable business model in the AI era. Despite claiming it will continue hiring in strategic areas, the company has now eliminated more than 2,000 positions over the past three years whilst simultaneously investing heavily in AI capabilities that have yet to meaningfully impact revenue growth. 2
Founder Control Provides Power But No Guarantees
Bhusri's return comes with extraordinary authority that few CEOs enjoy. The dual-class share structure gives him and Duffield 68% of voting control, with Class B shares carrying 10 votes each compared to one vote for publicly traded Class A shares. This structure, dating back to Workday's 2012 IPO, means Bhusri can implement sweeping changes without fear of shareholder revolt. The arrangement even stipulates that if either co-founder becomes incapacitated or dies, the other assumes control of both stakes.
This concentration of power will remain in place until October 2032—conveniently one year after Bhusri's performance window closes in early 2031. The timeline gives him substantial runway to execute his turnaround strategy, but it also highlights the challenge ahead. To earn his full performance-based compensation, Bhusri must more than double Workday's stock price from current levels of approximately £116 to its previous peak above £241. Former CEO Eschenbach, meanwhile, departed with a severance package worth roughly £2.8 million ($3.6 million) plus accelerated vesting on nearly 140,000 restricted stock units valued at over £15 million ($20 million). His "push-out score"—an independent assessment of departure terms—ranked nine out of 10, suggesting he was pressured to leave.
Bhusri's extensive leadership experience distinguishes him from many returning founders. He served as sole CEO from 2014 to 2020, then as co-CEO until January 2024, giving him two decades of decision-making data and intimate knowledge of Workday's operations. In his LinkedIn post announcing the transition, Bhusri positioned AI as "an even bigger transformation than the shift to cloud 20 years ago," arguing that Workday's 20 years of process history and enterprise data provide competitive advantages in developing AI-powered solutions.
The Verdict: High Stakes Bet on Founder Magic
Workday's decision to bring Bhusri back represents both confidence in founder-led turnarounds and acknowledgement of how dire the situation has become. The structure of his compensation package—with half requiring no performance metrics beyond staying employed—suggests the board views preventing further value destruction as a realistic goal. Whether Bhusri can actually reverse course and restore Workday to its former valuation remains highly uncertain.
The broader software sector faces an existential reckoning as AI threatens to commoditise applications that once commanded premium prices. Workday must prove it can transition from a seat-based pricing model to an AI-enhanced platform that delivers sufficient value to justify its costs. With Bhusri's personal fortune, professional legacy, and £107 million compensation package all riding on the outcome, the next five years will determine whether founder returns can truly save struggling tech giants—or whether they're simply a comforting ritual as industries undergo fundamental transformation.