Workday, a cloud-only business planning software company, will lay off 3% of its employees, the company’s co-CEOs wrote in a message to employees Tuesday.

In October 2022, the company reported head count of more than 17,500 employees, an increase of over 15% compared with January of that year. That means the cuts should affect about 525 people.

Shares of Workday were up about 1% when markets opened.

The cuts are not the result of overhiring and the “majority” will occur in Workday’s technology and product units, co-CEOs Aneel Bhusri and Carl Eschenbach wrote. For the period ending October 2022, Workday reported an increase of $228 million in “employee-related expenses, including share-based compensation,” which the company said was largely due to head count growth.

“While our confidence in the fundamentals of our business and future growth prospects remains strong, we continue to operate in a global economic environment that is challenging for companies of all sizes,” the co-CEOs said in the message.

The company intends to continue hiring throughout fiscal year 2024, the executives said.

Employees who lost their jobs will receive three months of severance pay and an additional two weeks of pay for each year of employment. Stock vesting will continue through April 2023, and like many other tech companies that laid off workers, Workday executives said, the company will offer immigration support and optional medical benefits for six months.

Severance packages for international employees would be “similar” to those offered to U.S. employees, Bhusri and Eschenbach wrote in the message.

Workday went public in October 2012. The company had a little more than 1,600 employees at the time, according to PitchBook data.