Workday Inc ( WDAY ) shares are trading higher Wednesday after the company announced plans to cut its workforce by 8.5% to lean further into AI.

What To Know: Workday announced a restructuring plan aimed at prioritizing investments and the human capital management company’s ongoing focus on durable growth.

Workday said it will cut approximately 1,750 positions, or 8.5% of its workforce, and exit some of its office space.

In a note to Workday employees, CEO Carl Eschenbach explained that the move is part of the company’s push to use AI to drive a “new era of growth.” Increasing AI demand has created a “massive opportunity” for Workday, Eschenbach said.

“We have so much opportunity ahead of us, especially with the potential of AI, and we have a strong foundation to build upon,” the Workday CEO said.

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Workday said it expects to incur approximately $230 million to $270 million in charges in connection with the restructuring plan. Approximately $60 million to $70 million of the charges are expected to be recognized in the fourth quarter. The remainder is expected to be recognized in the first quarter. The plan is expected to be substantially complete by the second quarter.

Workday also announced that it will report financial results for the fourth quarter on Feb. 25. The company said it expects fourth-quarter results to be in line with or above the guidance provided last quarter.

Analysts currently expect the company to report earnings of $1.77 per share and revenue of $2.18 billion, according to estimates from Benzinga Pro.

WDAY Price Action: Workday shares were up 3.14% at $267.89 at the time of publication Wednesday, according to Benzinga Pro.