Workday’s CEO Shuffle Is a Sign of Things to Come

Last week’s sell-off in software stocks is having an impact. Enterprise software firm Workday revealed Monday it had replaced its CEO, Carl Eschenbach, with co-founder and former CEO Aneel Bhusri, who is returning “to lead the company’s next chapter.” Bhusri, to be clear, has led the company for most of its chapters, having been either co-CEO or sole CEO from 2009 through 2024. What Workday seems to be saying is: “Everyone is freaking out about the impact of AI on software, so we’re bringing back a veteran to reassure everyone that we’ve got this.” 

Unfortunately, investors seemed to interpret the move as a sign of panic. How else to explain the fact that Workday stock dropped 5% on Monday after having tumbled 7% last week? It’s not as though Eschenbach was doing a bad job—at least it didn’t look that way from the outside. Yes, revenue growth slowed to 12.6% in the first nine months of the fiscal year ended January, from 16% to 17% in the two years before that. That’s not great, but it’s not terrible. And Workday has been aggressively investing in AI-related areas. In November, it announced the purchase of Pipedream, which connects AI agents to business apps. My colleague Kevin McLaughlin wrote today that Workday had also acquired enterprise AI startups Sana and Paradox and developed its own AI models to automate tasks such as generating job descriptions and scanning résumés.