(Reuters) - Workday shares dropped more than 12% before the bell on Friday, after the human resources software provider pared back its annual subscription revenue forecast as economic uncertainty and slower hiring hurt demand for its payroll services.

Enterprises have slowed down hiring of new employees as they navigate pressures from higher-for-longer interest rates and sticky inflation.

Workday is set to lose more than $8 billion in market value, if premarket losses hold.

The company expects subscription revenue to be between $7.70 billion and $7.73 billion for the fiscal year 2025, down from its prior forecast of $7.73 billion to $7.78 billion, it said after markets closed on Thursday.

Analysts currently expect full-year subscription revenue at $7.73 billion, according to LSEG data.

"While growth will be incrementally slower, we believe the driver is macro, not company-specific," Bernstein analysts wrote in a note.

U.S. job growth slowed more than expected in April and the increase in annual wages had fallen below 4% for the first time in nearly three years.

Analysts also pointed to large enterprise deal closures taking longer, especially in Europe, hurting Workday's forecast.

"Workday experienced pressure in Europe, lower headcount upon renewals and increased scrutiny on larger deals during the quarter," Morningstar analysts wrote in a note.

The company closed fewer large deals in the first quarter, notably in the Europe, Middle East and Africa geographies, compared to the same period last year, CEO Carl Eschenbach said on a post-earnings call on Thursday.

Workday's total revenue for the quarter stood at $1.99 billion, compared with analysts' estimate of $1.97 billion.

"It's just a tougher environment for most industries that we saw on a global basis, particularly Europe," Workday Co-President Douglas Robinson had said on Thursday.

At least 15 brokerages cut their price targets for the stock on Friday.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)