Workday on Monday announced that CEO Carl Eschenbach is stepping down from his role and will be replaced by the company’s co-founder, Aneel Bhusri, effective immediately.

Bhusri has previously held a range of leadership roles at the software maker, serving as co-CEO from 2009 to 2014, CEO from 2014 to 2020, co-CEO from 2020 to 2024 and executive chair from 2024 to 2026.

Eschenbach was named co-CEO of Workday alongside Bhusri in 2022, and took on the top job solo in 2024.

Software stocks, including Workday, have been under pressure in recent months as investors have grown worried about the potential for artificial intelligence to disrupt the sector. Workday shares lost 17% last year and are down more than 20% year to date.

Shares of the company sank 5% on Monday.

“We’re now entering one of the most pivotal moments in our history,” Bhusri said in a statement. AI is a bigger transformation than SaaS — and it will define the next generation of market leaders.”

Salesforce, Oracle and Microsoft are among the major SaaS, or software as a service, companies.

Last month, Eschenbach tried to brush off concerns about AI’s impact on the software sector, telling CNBC that the narrative is “overblown” and “not true.”

Workday cut roughly 1,750 jobs last year to bolster its investment in the technology.

“It’s been a privilege to serve as CEO over the past three years and I’m proud of all we achieved — instilling greater operational discipline, expanding globally, broadening our industry focus, and laying meaningful groundwork in AI,” Eschenbach said in a statement on Monday.

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