Feb 5 (Reuters) - Workday said on Wednesday it

will cut around 1,750 jobs, or 8.5% of its current workforce, as

the human capital management firm invests heavily in artificial

intelligence to counter a softer macroeconomic environment.

Shares of the California-based company jumped over 4% in

premarket trading.

Workday CEO Carl Eschenbach said the layoffs are necessary

to prioritize investments such as artificial intelligence, while

also freeing up resources to expand the company's presence in

different countries.

The layoffs come at a time when the human capital management

industry has grappled with slower spending by enterprise clients

as high interest rates have pressured tech budgets.

Workday expects to incur around $230 million to $270 million

in charges connected to the cost reduction plan, of which,

around $60 million to $70 million is expected to be recognized

in the fourth quarter.

As of Jan. 31 last year, the company had around 18,800

employees.

Workday faces stiff competition from other players in a

crowded industry as firms consolidate their position through

acquisitions to take market share.

Last month, Paychex ( PAYX ) said it will acquire Paycor

for $4.1 billion in cash, while Automatic Data

Processing ( ADP ) acquired management services provider

WorkForce Software for around $1.2 billion in cash in October.

Workday also said it expects its fiscal fourth quarter and

full-year financial results to be in-line with or above its

prior forecast.

The company forecast annual subscription revenue of $7.70

billion in November while it expects fourth-quarter subscription

revenue to be $2.03 billion - in line with analysts

expectations, as per data compiled by LSEG.

Workday also said it expects to close certain office spaces

that it owns and the actions associated with the cost reduction

plans should be completed by the second quarter of fiscal 2026.