Post methodology: Claude 3.7 via custom Dust assistant @TDep-SubstackPost with the system prompt: Please read the text of the podcast transcript in the prompt and write a short post that summarizes the main points and incorporates any recent news articles, substack posts or X posts that provide helpful context for the interview. Please make the post as concise as possible and avoid academic language or footnotes. please put any linked articles or tweets inline in the text. Please refer to Podcast guests by their first names after the initial mention. Light editing and reformatting for the Substack editor.Carl Eschenbach, CEO of Workday and former Sequoia partner, recently joined Pat Grady and Sonya Huang on Training Data to discuss how Workday is evolving to become the system of record not just for people and money, but also for AI agents in the enterprise.
The Future of Enterprise AI: Human and Digital Workers Coexisting
Carl emphasizes that AI will drive a fundamental shift from humans working with technology to technology working for humans. "The power of AI is going to happen when we transform that equation and the technology works for us," he explains. Rather than replacing human workers entirely, Carl envisions a future where AI agents and humans "peacefully coexist" in the workplace.
This vision has recently materialized in Workday's February 2025 announcement of their Agent System of Record - a platform designed to help organizations manage their entire fleet of AI agents alongside their human workforce. As Carl told Fortune, these agents will become "digital employees" that work alongside human ones, taking on repetitive tasks while allowing humans to focus on more strategic work.
Three-Pronged Approach to Monetizing AI
Workday is implementing a multi-faceted approach to monetizing AI:
Seat-based pricing: An uplift on existing per-seat costs for AI features that benefit all employees
Role-based agents: Standalone pricing for specialized AI agents that perform specific roles (payroll, contracts, financial auditing)
Consumption-based API access: Metered pricing for external AI applications accessing Workday data
In recent months, Workday has expanded its agent offerings to include payroll, contracts, financial auditing, and policy agents, with their recruiting agent already showing impressive results - 50% increase in recruiter productivity and 20-40% acceleration in time-to-hire.
JUMP TO: Workday’s approach to monetizing AI
Domain Expertise Trumps General Intelligence
Carl argues that in enterprise settings, domain-specific agents with highly-curated data will be far more valuable than general-purpose AI models. "When you have that much data, and you have the context of it and you're in the actual workflow, the business process workflow, you can then use agents to drive actual results that people see value in," he explains.
This perspective aligns with Workday's recent strategic shift. In February 2025, the company laid off 1,750 employees (8.5% of its workforce) to prioritize investments in AI innovation, with Carl writing that the restructuring was to "better align our resources with our customers' evolving needs."
The Return of Enterprise Sales
Despite recent trends toward product-led growth, Carl observes that AI solutions still require a traditional enterprise sales approach: "With AI, it's a top-down sale in most cases. It's not product-led growth up through the enterprise."
This insight reflects Carl's 35+ years of technology leadership experience, including his time at VMware and Sequoia. He brings a balanced perspective to AI implementation, emphasizing that while cost savings are important, companies should frame AI initiatives around driving growth rather than just ROI.
Skills Over Credentials in the AI Era
One of the most promising aspects of AI, according to Carl, is its ability to better match talent to opportunities based on skills rather than traditional credentials. He cites Accenture as an example, where 30-35% of new hires now don't have college degrees, instead being matched to roles based on their skills.
Workday is leveraging this trend with its Talent Optimization and mobility agents, which have shown up to 40% reduction in attrition by improving internal mobility and skill-based matching.
As organizations navigate the transition to an AI-powered workplace, Carl reminds us that human agency remains essential: "Technology enables change. That's all it does. It enables change. To drive change, it still takes people, no matter what."
Hosted by Sonya Huang and Pat Grady
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