Workday acquires AI firm Sana for $1.1B to boost HR automation

Workday announced it will acquire AI firm Sana for approximately $1.1 billion, marking another significant consolidation move in the rapidly evolving HR software sector. The deal underscores how established HR platforms are aggressively pursuing AI capabilities to meet growing customer demands for automated workplace solutions, joining a wave of major acquisitions that have reshaped the industry landscape this year.

The big picture: HR software companies are consolidating at breakneck speed as they race to integrate AI capabilities into their platforms.

• Private equity firm Thoma Bravo agreed to buy Workday rival Dayforce for $12.3 billion just last month.
• Paychex announced a $4.1 billion acquisition of rival Paycor earlier this year.
• Automatic Data Processing purchased WorkForce Software for about $1.2 billion in 2024.

What Sana brings: Founded in 2016, Sana specializes in creating AI agents that automate specific business tasks across organizations.

• The company will continue developing AI automation tools as part of Workday’s expanding platform.
• Sana’s technology will integrate with Workday’s existing cloud-based applications for recruitment, payroll, accounting, and auditing.

In plain English: AI agents are software programs that can complete tasks automatically without human intervention—like digital assistants that can handle specific business processes from start to finish.

Key capabilities: Workday customers will gain access to sophisticated AI-powered automation tools for core HR functions.

• Hiring managers will be able to generate tailored dashboards automatically.
• The platform will automate entire performance review processes.
• These features build on Workday’s single, cloud-based platform that already manages key business services.

Strategic context: This acquisition follows Workday’s announcement last month to purchase Paradox, another AI-focused company.

• The Paradox deal gives Workday access to an AI-powered talent acquisition suite.
• Together, these acquisitions position Workday to offer comprehensive AI-driven solutions for finding, hiring, and onboarding employees more efficiently.

Timeline: The Sana transaction is expected to close in the fourth quarter of Workday’s fiscal year 2026, ending January 31.

• Allen & Company is serving as the financial adviser to Workday for the deal.