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Musk and Ramaswamy have plans for the DOGE, and Workday sees an opportunity.
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Workday wants to take advantage of federal agencies’ shift from on-premise to cloud systems, the CEO said.
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The federal government, the largest U.S. employer, is facing possible layoffs as part of DOGE’s agenda.
As Elon Musk and Vivek Ramaswamy prepare to reshape large parts of the federal government, a major software player sees an opportunity.
Workday, the HR software company that employees love to hate, is embedded in more than half of the Fortune 500 companies. The $72 billion company has built its customer base in government, from Tulsa County, Oklahoma, to the U.S. Department of Energy. In 2022, Workday was cleared to work with the federal government.
With Musk and Ramaswamy’s Department of Government Efficiency set to advise President-elect Donald Trump on rolling back regulations and cutting administrative costs, Workday and other government vendors could benefit.
During Workday’s earnings call on Tuesday, CEO Carl Eschenbach answered an analyst’s question about how DOGE could impact Workday’s business.
Eschenbach said more than 80% of the federal government’s HR systems are physically housed on local servers, which are called “on-premises.” Companies and organizations are steadily migrating from local servers to the cloud, partly for cost savings, better security and efficiency.
“After the election and with DOGE coming out, people are definitely looking for more economies of scale and more efficiencies. And I can tell you that supporting these legacy systems on-premise is not the way to do that,” Eschenbach said.
Eschenbach added that federal agencies are at a “tipping point” and ready to move to the cloud — and that Workday has a government-focused product to sell them.
“We think this will only be a boost to us as we think about the future business of the federal government,” he said.
Workday said in May it would work with the Department of Energy and the Defense Intelligence Agency.
“These are critical wins for us and it actually drives demand for us across the federal government as people recognize that Workday is really going hard into that market,” Eschenbach said on Tuesday’s call.
Last quarter, Workday generated $2.2 billion in revenue – a 16% increase over last year. The company does not break down revenue by customer type. Workday shares are up 14% in the past year.
The company did not respond to Business Insider’s request for comment, which was sent after business hours.
Last week, Musk and Ramaswamy listed some of DOGE’s targets in a Wall Street Journal column: work-from-home arrangements, Planned Parenthood, the Corporation for Public Broadcasting and the general workforce, among others.
“DOGE intends to work with embedded appointees in agencies to identify the minimum number of employees necessary at an agency to perform its constitutionally authorized and legally mandated functions,” the pair wrote.
The federal government is the largest employer in the US, with a workforce of more than 2 million Americansso the group’s suggestions could have far-reaching consequences.
The Washington Post reported Sunday that notable Silicon Valley figures — including Palantir co-founder Joe Lonsdale, investor Marc Andreessen, hedge fund manager Bill Ackman and former Uber CEO turned food tech entrepreneur Travis Kalanick — have been involved in DOGE’s early plans.
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