Workday wants a slice of customers' labour budget that its AI agents could replace

Workday aims to tap into customers' labour and outsourcing budgets to fund its AI agents, rather than relying solely on IT spending, as it expands automation into HR and finance functions. Speaking at the company's annual conference in Las Vegas, Workday's leadership highlighted AI's potential to drive growth while reducing the need for new hires.

The company expects AI agent charges to grow with usage, rather than based on the number of licensed software users. Chief AI Officer Joel Hellermark emphasized that automating tasks like HR could open new revenue streams beyond software budgets, into customer's labor and services expenses, where they spend significant amounts on outsourcing.

Hellermark noted that self-service AI agents have already improved resolution rates for common tasks by 25 percent. Workday co-founder and CEO Aneel Bhusri stated that AI is helping the company grow without a proportional increase in headcount. He discussed how using AI internally could drive margins and reduce the need to hire in areas previously considered for hiring.

Recently, Workday launched broader access to its HR and finance systems through its Model Context Protocol (MCP) tools, allowing AI agents to interact with data without navigating the application interface. This data access is subject to Workday's permissions, approvals, and audit trails. The company's Data Cloud supports integration with platforms like Snowflake, Databricks, and Salesforce, using Apache Iceberg open table format.

Bhusri anticipates customers will be charged based on consumption, with bills increasing as usage grows. He believes this consumption-based pricing model is superior to traditional subscription-based models, especially when considering cloud service costs. In August, private equity firm Silver Lake was reportedly negotiating to acquire Workday, though the company did not comment.

Bhusri returned as CEO in February, replacing Carl Eschenbach, who left with a $3.6 million lump-sum payment. Bhusri aimed to centralize responsibility for AI, which had previously been scattered among various application teams.