After "Microsoft"... a malfunction in an American platform for managing salaries confuses major companies

After days of global disruption that affected Microsoft services and affected e-mail, meetings, and daily operations of organizations in more than 70 countries, Workday, a company specializing in human and financial resources management software, faced a widespread failure that prevented employees in several companies and institutions from accessing their accounts and completing their job transactions.

The disturbance, which began on Friday evening, included systems used by major companies, including Walmart, Target, and Nordstrom, according to media reports. Other reports indicated that employees in companies such as Chipotle and Skechers were affected, but there is no confirmed toll of the companies or employees affected by the problem.

Workday, which is based in Pleasanton, California, explained that it placed some of its systems in maintenance mode, after discovering a problem during testing of backup systems, which led to some data being in an inconsistent state, which may cause errors when users try to access their accounts or complete their transactions.

The disruption resulted in some employees being unable to access payroll data, submit leave requests, manage job benefits, as well as record attendance and departure and complete some administrative and training procedures. The company apologized to the affected customers, and said that it was working to determine the best way to restore services, while pledging to provide updates every 30 minutes, without specifying a date for the full return of the affected systems in the latest statement reported by the reports.

More than 11,500 organizations around the world use the Workday platform to manage a range of core functions, including payroll, recruitment, employee benefits and leave. This prevalence means that platform disruption can go beyond login issues to disrupt administrative procedures that companies rely on to manage their workforce.

This disruption comes after the outage that affected Microsoft services for more than 24 hours, affecting the Outlook and Teams applications and other services, amid more than 7.4 million reports of service problems from more than 70 countries and territories, according to Down Detector data. The credit rating agency Morningstar DBRS estimated the potential insurance losses resulting from that outage at between $300 and $500 million.

Despite the different nature of the two services, the two incidents reveal the widespread dependence of companies on external technical platforms to manage functions that have become essential to the continuation of their business. While the Microsoft malfunction disrupted communication, email, and meetings, the Workday malfunction affected the human resources, payroll, and employee management systems.

These disruptions raise the issue of companies' ability to continue operating when the software providers they rely on fail, and the readiness of their alternative systems and business continuity plans. The greater the reliance on centralized platforms to manage day-to-day operations, the greater the likelihood that technical disruption will spread from a single service to a broader scope of operational activity.

Insurance losses resulting from the global outage of Microsoft services may reach between $300 and $500 million, according to estimates by Morningstar DBRS, an indication of the vast economic cost of one of the largest disruptions to the digital infrastructure this year.

The estimates of “Morningstar DBRS” - a global credit rating agency, and one of the four largest agencies in this field globally - came after a disruption that lasted more than 24 hours and affected the company’s email services, meetings, and cloud applications, amid more than 7.4 million reports of service interruptions in more than 70 countries and territories, according to data from the “Down Detector” platform. On Saturday, Microsoft announced the complete restoration of services and addressing the remaining problems experienced by users.

These losses reflect the extent of global dependence on the company's services, after the repercussions of the disruption extended to multiple sectors, from government institutions, courts, and hospitals to airlines, banks, and financial markets.

Morningstar DBRS estimates that insured losses range between $300 million and $500 million, which is less than the estimates associated with the outage of CrowdStrike services in July 2024, which ranged between $400 million and $1.5 billion. This incident affected more than 8 million Windows devices, and led to widespread disruption in the aviation, financial services, and health care sectors.

The impact of Microsoft's failure was not limited to individual users, but also extended to organizations that rely on its services to run their daily businesses. Government agencies, courts, and health institutions faced difficulties in accessing e-mail and managing appointments and meetings, while airlines, banks, and financial institutions were affected by the capabilities of communication and information exchange.

In Britain, a trial session in Manchester was temporarily halted, while health services and pharmacies faced delays in processing prescriptions, and police electronic crime reporting services were affected. Government agencies in Singapore, Japan, Greece, Norway, and Australia also announced disruptions related to the outage.

In the financial sector, companies and institutions faced difficulties in internal communication and management of operations. Euronext Group's email services were affected, while financial companies in Taiwan resorted to using fax to confirm some deals, and one institution canceled a bond buyback. Companies were also forced to adjust the dates for announcing their financial results or postpone some communications with investors.

Microsoft said that the defect was linked to a problem that appeared during a previous update to increase network capacity, after a change in network settings led to some servers unexpectedly crashing during automated scans. The company explained that it addressed the main problem, and that it worked to restore services in the areas that remained affected and address the accumulation of emails.

The company denied any indications of malicious activity or a cyberattack, and ruled out that the use of artificial intelligence agents was behind the disruption. It said it would publish a later report containing the results of its review of the incident.

Microsoft 365 services, including Outlook, Teams, and CoPilot, were among the affected services, while some other applications continued to function normally. The defect was particularly concentrated in the “Exchange Online” service, which is responsible for e-mail and calendars, which prevented users from sending and receiving messages, accessing their mailboxes, and managing their appointments.

The number of reports registered with Down Detector exceeded 7.4 million reports from more than 70 countries and territories, with the rate at the peak of the outage reaching about 20,000 reports per minute, i.e. more than 1,500 times the usual level. These numbers do not necessarily reflect the number of affected users; The platform records reports submitted by users about the problems they face.

The incident highlights the risks associated with concentrating digital services in a limited number of companies, at a time when organizations around the world rely on major providers to operate email, internal communication, data storage, and cloud infrastructure. Despite the availability of technical alternatives, moving to another provider remains an expensive and complex process, because systems, data, and applications are linked to a single system.

Microsoft's services were subjected to other outages during the current year, and its Azure cloud services also witnessed disruption last month. These incidents underscore the importance of strengthening business continuity plans, and providing backup systems and alternative sources for basic services, to limit the impact of any widespread technical failure.

Anthropic CEO Dario Amodei defended the company's tough approach to ensuring the safety of artificial intelligence, placing it at the forefront of his message to investors, days before the company's shares were to go public on the Nasdaq Stock Exchange in one of the largest anticipated listings in the history of the markets.

Amodei said, during an interview on Friday in New York with the CEO of JP Morgan Chase, Jamie Dimon, that the company deals with the issue of security with extreme caution, adding: “We are very suspicious.” He explained that this trend was not limited to developing its products, but rather contributed to shaping its culture and commercial strategy.

He pointed out that the company chose to focus on the business sector and programming tools, rather than expanding into artificial intelligence applications directed to consumers, considering that this path complements its priority of ensuring security. This approach differs from the strategy of its competitor, OpenAI, which developed the ChatGPT chatbot.

Anthropic, the developer of the artificial intelligence assistant “Cloud,” is preparing to begin trading on Nasdaq next Thursday, under the symbol “ANT,” after setting a price range ranging between $70 and $78 per share. The transaction could raise up to $64 billion, with a valuation of the company approaching $1.4 trillion at the high end of the price range, a level lower than the $2 trillion valuation that was on the table as of early fall.

The offering comes at a sensitive time for the artificial intelligence sector, with the increasing volatility of its companies’ shares in the markets, amid doubts about the companies’ ability to achieve returns equivalent to the huge spending on developing models and the infrastructure necessary to operate them.

In this context, the report indicated that Nvidia, the largest producer of chips used in artificial intelligence applications and a shareholder in Anthropic, is also facing the repercussions of a crisis related to its CEO, Jensen Huang, against the backdrop of reports of extramarital affairs and suspicions related to Chinese espionage and smuggling of artificial intelligence chips.

For his part, Amodei said that the company will continue to enter new markets by expanding the technical capabilities of its models, expecting that areas such as scientific research will become much larger markets than programming, which currently represents the core of the company’s revenues, and achieve returns that exceed those provided by chat applications directed to the general public.

Amodei's talk was not limited to technology, but he devoted a large portion of his time to talking about the company's culture and the criteria for selecting its employees, saying that he spends between 40 and 50 percent of his time on recruitment and building a work culture, as they are among his most important priorities.

He explained that each candidate undergoes a dedicated interview to assess the extent of his compatibility with the company’s culture, and that Anthropic excluded highly qualified candidates due to their lack of compatibility with this culture. He stressed that it does not want employees who seek to monopolize achievements or lack the ability to work together, but rather people who put the public interest at the top of their priorities.