New Article in Computerworld Features Insights from CBPP’s Tim DeStefano on AI Adoption

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Workday Inc., a leading provider of cloud-based human resources software, has announced plans to lay off approximately 1,750 employees, representing about 8.5% of its global workforce. This move is part of a strategic restructuring aimed at increasing investments in artificial intelligence (AI) and accelerating international growth. CEO Carl Eschenbach emphasized the necessity of aligning resources with evolving customer demands, particularly the rising need for AI-driven solutions.

Industry experts have raised concerns about potential disruptions to customer support due to the layoffs, and there is apprehension about whether AI support can maintain the level of service enterprise clients expect.

Timothy DeStefano, Associate Research Professor at Georgetown University’s McDonough School of Business, offered insights into how companies can navigate such transitions. He suggested that to prevent layoffs from affecting customer support quality, businesses should avoid eliminating positions critical to customer engagement. “It may also be helpful for the business to cross-train employees so that the remaining workers can handle multiple roles during the transition,” DeStefano advised. “Additionally, while the company is laying off employees, they are not enacting a hiring freeze. Instead, they have stated that they will add workers to critical locations and roles within the company, along with making AI investments, to maintain and enhance its applications for consumers throughout the transition and in the long run.”

DeStefano also highlighted the potential benefits of investing in AI, despite the initial costs and challenges. “Making investments in technology, particularly AI, is not cheap, but an accumulation of empirical evidence suggests that, if done correctly, performance improvements and efficiency gains can be achieved,” he noted. However, he cautioned that implementing new technologies requires time and restructuring, which may lead to temporary challenges, like layoffs.

Regarding Workday’s focus on international expansion, DeStefano observed that the company is adopting a multifaceted strategy to ensure financial stability, encompassing cost reductions, overseas market expansion, and investments in tools designed to enhance decision-making and efficiency. 

Workday’s decision to restructure and prioritize AI initiatives reflects broader industry trends, as companies adapt to technological advancements and shifting market demands. As the company navigates this transition, it underscores the importance of strategic planning and investment in innovation to maintain competitiveness in the evolving digital landscape.