By Nate Wolf

Workday responded to the turbulence rocking the software industry with a shake-up of its own on Monday. Co-founder Aneel Bhusri has returned to the company to succeed Carl Eschenbach as CEO.

Eschenbach stepped down Monday after a rocky two years at the helm of the enterprise-management software company. The board deemed Bhusri the right person to lead the company in a software environment being disrupted by artificial intelligence.

Bhusri founded Workday with Dave Duffield in 2005. He then served as co-CEO with Duffield from 2009 to 2014, CEO from 2014 to 2020, and co-CEO again from 2020 to 2024. He has been the chair of the board since then.

"We're now entering one of the most pivotal moments in our history," Bhusri said in a statement Monday. "AI is a bigger transformation than [software-as-a-service] -- and it will define the next generation of market leaders."

Shares sank 6% on Monday as Wall Street seemed to take Bhusri's return as a sign of Workday's struggles rather than the kick-start the company needs.

"Getting investors to take a fresh look at Workday is going to require a lot of handholding combined with consistent execution on its AI strategy, " Evercore ISI analyst Kirk Materne wrote in a research note Monday. "Point being, any benefits from a shareholder perspective from this transition are going to take some time."

Workday stock has plummeted 29% this year and 44% over the last 12 months as investors have fled the enterprise software sector. The fear is that AI tools will both lessen the need for specialized software applications and reduce headcount at the organizations who currently rely on them. Workday has integrated AI agents into its offerings, much like its peer Salesforce, but investors remain skeptical.

Brian Schwartz of Oppenheimer & Co said Bhusri brings a mix of enterprise software expertise, institutional knowledge, and customer relationships. The transition, Schwartz argued, comes at a crucial time for a company lagging behind its peers in revenue and stock growth.

"In our view, he seems like the right person to lead Workday through the software industry transition to AI technologies," Schwartz wrote.

In its 11-plus years as a public company before Bhusri's departure from the C-suite, Workday stock had an annualized return of 23%, according to Dow Jones Market Data. Time will tell whether he can repeat the trick.

Write to Nate Wolf at nate.wolf@barrons.com

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February 09, 2026 14:15 ET (19:15 GMT)

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