Workday shares sink over 13% as slower hiring hits payroll services demand

Workday is set to lose about $9 billion in , if losses hold.

The company expects subscription revenue to be between $7.70 billion and $7.73 billion for the fiscal year 2025, down from its prior forecast of $7.73 billion to $7.78 billion, it said after markets closed on Thursday.

Analysts currently expect full-year subscription revenue at $7.73 billion, according to data.

"While growth will be incrementally slower, we believe the driver is macro, not company-specific," analysts wrote in a note.

U.S. slowed more than expected in April and the increase in had fallen below 4% for the first time in nearly three years.

Analysts also pointed to taking longer, especially in , hurting Workday's forecast.

"Workday experienced pressure in Europe, lower headcount upon renewals and increased scrutiny on larger deals during the quarter," analysts wrote in a note.

The company closed fewer large deals in the first quarter, notably in the Europe, and Africa geographies, compared to the same period last year, CEO Carl Eschenbach said on a post-earnings call on Thursday.

Workday's total revenue for the quarter stood at $1.99 billion, compared with analysts' estimate of $1.97 billion.

"It's just a tougher environment for most industries that we saw on a global basis, particularly Europe," Workday Co-President Douglas Robinson had said on Thursday.

At least 15 brokerages cut their price targets for the stock on Friday. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)