The state that paid $99 million for Workday payroll now wants a university to run it instead
Rhode Island's $99 million Workday rollout has mispaid state workers since December, and now the state has asked URI to consider taking payroll in-house. The same week, Workday cut 500 jobs, put up to 80 Dublin roles at risk, and its cofounder's trust sold $18.7 million of stock.
Vincent Jiang · 3 min read
Wrong checks since December
Rhode Island finished its roughly $99 million Workday payroll and ERP overhaul, implemented by Accenture, late last year, and has spent 2026 paying for it twice: once in cash, once in corrections 1. Workers have seen wrong wages, overtime, benefits and deductions, plus mislabeled W-2s that forced repeated tax amendments, while the payroll transparency portal has sat dark since October 2025 1.
Four state employees sued in May 2026 on behalf of a class they estimate could pass 20,000, alleging the rollout, administered by Workday, caused "systemic and widespread pay problems"; two of the same law firms sued over Seattle's Workday payroll last year for 14,000 workers, a pattern alleged, not found 2. The state says it has ensured "employees received any compensation owed to them" 2.
A year late, the payroll question reopens
The University of Rhode Island asked the state a year ago whether to run its own full-time payroll and was told no, so it designed its half-built system around the state's 1. The state has now reopened the question, and URI is "looking at several options, including that one," finance vice president Abby Benson wrote, warning of "significant monetary and project schedule impacts" before an October 2027 launch 1. She calls Workday "a great system," blaming configuration, not the software 1.
Customers learn to build what vendors sell
The demand side pulls the same way. Consultancy West Monroe built a payroll error-checker with ChatGPT and Codex rather than pay a vendor more than $300,000 a year, by its chief people officer's estimate, and about a third of 1,719 executives in a McKinsey survey skipped at least one software purchase to build with AI 3. Workday's chief technology officer, Gabe Monroy, named the risk in June: an agent that skips a compliance step means "an audit, a regulator, or a lawsuit" 3.
The cost line concedes first
Workday's 29 September filing cuts about 2.5% of the 20,896 staff it reported on 31 July, mostly Product and Technology, for $65 million to $80 million in charges, reiterating every fiscal 2027 guide except GAAP operating margin 45. February took roughly 400 roles; about a week later chief executive Carl Eschenbach exited, and cofounder Aneel Bhusri returned 6.
Workday has cut or put at risk roughly 1,000 roles in 2026
- Roles cut or at risk
- Estimate
Data
| Roles cut or at risk | |
|---|---|
| February 2026 | 400 roles |
| September 2026 | 520 roles |
| Dublin, at risk (estimate) | 80 roles |
Up to 80 more roles are at risk at the Dublin headquarters 7. Cofounder David Duffield's trust sold 98,971 shares on 28 September for about $18.7 million, an average of $188.55, under a plan adopted in December 2025, keeping some 35.8 million Class B shares 8. Revenue rose for a twelfth straight quarter, to $2.65 billion, up 12.8% year over year 9.
Twelve straight quarters of rising revenue, and the cuts landed anyway
Data
| Revenue | |
|---|---|
| Q3 '23 | $1.87B |
| Q4 '23 | $1.92B |
| Q1 '24 | $1.99B |
| Q2 '24 | $2.09B |
| Q3 '24 | $2.16B |
| Q4 '24 | $2.21B |
| Q1 '25 | $2.24B |
| Q2 '25 | $2.35B |
| Q3 '25 | $2.43B |
| Q4 '25 | $2.53B |
| Q1 '26 | $2.54B |
| Q2 '26 | $2.65B |
The defense is governance, and a top line that has not bent
Bhusri told analysts in August he still "hadn't met a single customer looking to replace Workday with something they're building internally" 6. The filings tie neither layoff round to AI, framing both as realignment 4. The money sorts cleanly either way: if add-on revenue stalls, the cost lands on WDAY holders; if it holds, the winners are the in-house builders and the AI vendors whose tools they rent.
The number that settles this is one no filing shows
URI and the state meet monthly before testing runs December 2026 through August 2027 1. Most of the restructuring charges land in the quarter ending 31 October 4. Skipped add-on revenue, the figure that would settle this story, appears in no filing yet.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
