Monday.com cuts 620 jobs in 20% workforce reduction as company pivots to AI Work Platform

Monday.com lays off hundreds to focuses on AI

Israeli workplace software maker Monday.com is laying off hundreds of employees as part of a restructuring plan to refocus its investments around AI projects. The company said it is reducing its headcount by 20%, or about 630 staff, to "support a leaner, more focused operating model" as it concentrates on its AI Work Platform. Monday.com earlier this year pivoted hard towards making its AI platform a core offering, redesigning its entire product around the belief that its enterprise customers increasingly want AI agents to work together with their employees. The AI Work Platform currently comprises a no-code app builder, a customizable AI agent, a workflow automation tool, and a chatbot that can do tasks like generating reports and updating dashboards. The company joins a host of large tech firms that have laid off hundreds of thousands of people as they seek to invest more in AI. Tech layoffs in May hit a monthly high unseen in years, and a record 78% companies have blamed a need to refocus their efforts around AI as a reason for letting people go this year, according to Layoffs.fyi. More than 122,000 tech roles have been cut so far in 2026, Layoffs.fyi data shows. Monday.com expects to incur $45 million to $55 million in charges due to the restructuring.

Monday.com is cutting 20 percent of its workforce as it pivots to an AI work platform

Monday.com plans to cut about 620 jobs, 20 percent of staff, as it restructures around its AI-driven growth strategy and flatter organisation Monday.com is cutting roughly 20 percent of its global workforce, about 620 people, as the Israeli project management company restructures around what it calls its AI Work Platform. The company disclosed the plan in a Form 6-K filed with the US Securities and Exchange Commission on Tuesday, citing the need to support a leaner operating model aligned with its AI-driven growth strategy. Co-founder and co-CEO Eran Zinman published a note to staff on LinkedIn calling it the most painful decision the company has made since its founding. The layoffs follow a brutal stretch for Monday.com's stock, which has lost more than half its value in 2026 and roughly 75 percent from its 52-week high. The company is caught in the broader SaaSpocalypse selloff that has punished enterprise software stocks as investors worry that AI agents and vibe coding could make conventional SaaS tools obsolete. Monday.com's market capitalisation has fallen to roughly $3 billion, a fraction of the valuations it commanded during the pandemic-era software boom. Zinman framed the restructuring as an offensive move rather than a defensive one, writing that the company is not making the change to protect what it has but to go all in on what it can become. He said Monday.com had shifted its core vision over the past nine months from managing work to doing the work for customers, with people and AI agents working together in one workspace. The organisation built for the previous chapter, he argued, does not fit the new AI era. The company expects to incur between $45 million and $55 million in restructuring charges, split between $30 million to $35 million in severance and employee benefits and roughly the same amount in office space impairments, partially offset by about $15 million in non-cash credits for share-based compensation. Most charges are expected to land in the second half of 2026. Monday.com said it plans to continue hiring in key strategic areas even as it cuts elsewhere. The restructuring mirrors moves by other SaaS companies caught between strong revenue growth and investor anxiety about AI disruption. Fellow Israeli software company Wix cut 20 percent of its staff in May, citing similar pressures from AI competition and a strengthening shekel, while Atlassian cut 1,600 jobs in March and replaced its CTO as part of its own AI pivot. The pattern across the industry is consistent: record or near-record revenues, significant headcount reductions, and savings redirected toward AI. Zinman addressed the obvious question directly in a FAQ appended to his note, writing that the decision was not made to reduce costs or replace people with AI. He described three structural changes: a flatter organisation with fewer management layers, more autonomous teams with broader ownership, and a new go-to-market model that puts staff closer to customers as they adopt AI. The company said it intends to reinvest the vast majority of savings in people, products, and future growth. Whether the market believes that framing remains to be seen. Monday.com reported first-quarter revenue of $351 million, up 24 percent year on year, the kind of growth rate that would have delighted investors two years ago. But in a market where AI is simultaneously the justification for cutting staff and the product companies are pivoting toward, the question is whether restructuring announcements like this one represent genuine strategic shifts or what OpenAI CEO Sam Altman has called AI washing, the practice of citing artificial intelligence to justify decisions driven by other pressures entirely.

'Painful Decision': Monday.com Cuts 20 Percent Of Workforce As AI Transformation Reshapes Business

'While we are seeing significant value from AI internally, this decision was not made to reduce costs or replace people with AI. We see internal AI adoption as an accelerator of our growth. This change was made to adapt the company to our new vision,' wrote Monday.com Co-founder and Co-CEO Eran Zinman in a LinkedIn post. AI work platform and project management software developer Monday.com is in the process of laying off about 20 percent of its workforce and is looking to assure investors and employees that the layoffs are not stemming from its own use of AI. Monday.com, based in Israel with North American headquarters in New York City, on July 22 said in an regulatory filing that the company initiated a restructuring plan to align its organizational structure with its focus on its AI Work Platform. "The Plan reflects the Company's ongoing transformation of its product, marketing, and go-to-market strategy and is intended to support a leaner, more focused operating model as the Company continues to invest in its AI-driven growth strategy. The Plan includes a reduction of approximately 20 [percent] of the Company's current workforce. The Company expects to continue hiring in key strategic areas throughout 2026," Monday.com said in the filing. [Related: ServiceNow CEO McDermott: 'We're Running The Table In CRM'] As a result of the layoffs, Monday.com expects to incur about $45 million to $55 million in net charges. This includes $30 million to $35 million related to severance payments, employee benefits, and related costs, as well as about $30 million to $35 million in charges related to the impairment of certain office space. Those costs are also expected to be partially offset by about $15 million in non-cash credits for share-based compensation. Monday.com co-founder and co-CEO Eran Zinman in a LinkedIn post wrote that his company has in the last nine months shifted its core vision from managing work to doing the work for its customers as humans and AI agents increasingly work together in one workspace, which required the company to change its products, strategy, and how it serves customers. However, Zinman wrote, the company's organization does not fit the new AI era, leading to the "very difficult" decision to reduce its global workforce by about 620 people, or about 20 percent of its employees. "This is the most painful decision we have made since founding [Monday.com] - yet we are certain it is the right one. We made it. We own it. And we take full responsibility for it. The people leaving are talented colleagues and friends. They helped build this company, support our customers, and create a culture we are deeply proud of. We are incredibly grateful to them, and we know that nothing we say can lessen the impact this will have on them and their families," he wrote. The restructuring comes in response to a new era where AI is transforming the role of software and opening a whole new market, one that requires a fundamental change in how the company operates in order to compete and win, Zinman wrote. As a result, Monday.com is looking to develop a flatter organization with fewer management layers, more autonomous teams with greater authority to execute, and a new go-to-market model to work more closely with customers, increase its on-site presence, and create new roles while adapting existing roles, he wrote. "Improving margins was not the purpose of this decision. We intend to reinvest the vast majority of the savings in our people, our products, AI, and future growth," he said. Zinman specifically called out concerns that the layoffs stemmed from AI improvements. "While we are seeing significant value from AI internally, this decision was not made to reduce costs or replace people with AI. We see internal AI adoption as an accelerator of our growth. This change was made to adapt the company to our new vision," he wrote. Monday.com spokespeople declined a CRN emailed request for more information, but instead directed attention to the U.S. Securities and Exchange Commission filing and Zinman's LinkedIn post. Tyler Manee, president of Ability Ops, a Frederick, Maryland-based solution provider and Monday.com's 2025 Partner of the Year, told CRN that he has seen Monday.com start providing automated first responses from AI agents starting over three years ago, and that the company's agents are really improving. "They're leaning into AI really hard," he said. "Monday.com has been around for a while. I think they were built in the era before AI, and now they're restructuring for the era of AI." Manee said he doesn't expect the layoffs to impact his company other than to encourage it to lean more into AI. "That's something we would have done anyway, given the nature of the field that we're in," he said. "They're encouraging us to grow AI partnerships to embody AI in our business processes and to learn how to leverage AI to best help our clients in our specific verticals." Ability Ops already runs pretty lean, with only 13 employees, and is pretty much services-focused, Manee said. "I don't think AI is in a place where it can replace my people," he said. "I do think AI is in a place where it can make our builders way faster. We are generating demos in an hour just from a transcript where we used to have to build that manually. We are taking a good in-depth discovery call to do a one-day turnaround of the first draft of a client's account. And no matter whether you're leveraging Monday's agents, or Claude, or additional things, I feel like AI is still only going to get you 80 percent of the way there. It's not 100 percent because there's always tweaks and the need to teach the team how to use it." Ability Ops uses an AI-based tool in its business processes for things like sales, marketing, invoice processing, as well as for building its own internal tools, Manee said. "But then in production, we're using AI for the first draft build of accounts for trickier operations," he said. "If we're doing any custom dev, that sort of stuff, we're leveraging that in our development team. We're right in line with the times in adopting AI. But we're only coming up on four years old, so I don't think we've had as long to grow too many layers of hierarchy. I think we're a flat organization, which is what Monday is readjusting to be."

AI layoffs mount amid software sector bloodbath

A businessman is seen working alongside a team of robots in this illustrative image of artificial intelligence. "AI layoffs" have become a familiar phrase at tech companies in the past two years. More and more companies, especially in the software sector, are downsizing workforces, citing the development of AI as the reason. These cuts can sometimes reduce a significant proportion of the company's employees in a single round of layoffs. AI layoffs can arise for several reasons, or a combination of these reasons. The development of AI in recent years has led to situations where human work is replaced by AI, or AI can do the same job faster or at a lower cost. In other instances, companies may reduce their human capital so that they can free up resources for the necessary investment in AI. There are also times when the development of AI threatens the business model of companies, and those companies have no choice but to cut back and change if they want to survive in the new world. This story has been given the frightening name "SaaSpocalypse", an apocalypse of SaaS companies, which provide enterprise software as a subscription in the cloud. Shares in the sector have fallen by tens of percent in recent months, amid capital market concerns that AI will damage, or even make redundant, the solutions companies offer and the entire SaaS business model. In addition, it cannot be denied that there may also be cases in which it is convenient for companies that are carrying out an aggressive round of layoffs to blame AI for the cuts they would probably have carried out anyway. Reaching Israelis too AI layoffs are of course also affecting Israeli software companies and causing an upheaval. The most recent example is monday.com (Nasdaq: MNDY), which announced on Wednesday the layoffs of 620 employees, which is about 20% of its workforce. As of the end of 2025, Monday had 1,729 employees in Israel, about 55% of its employees. monday.com, which provides an AI-based platform for managing work tasks, is traded on Nasdaq at a market cap of $3.1 billion, after its stock fell by about 75% in the past year. The company, led by co-founders Roy Mann and Eran Zinman, has made what it describes as the most significant change since the company was founded. monday.com explained that the change transforms the company from a work management platform to one that also does the work using AI agents that are integrated into it, allowing humans and agents to work together. The change also led to a new pricing model, in which customers will buy credits from Monday.com and use them to consume features it offers. Meanwhile, the stock market has not yet been convinced, and the stock is trading at levels close to its lowest. Someone who has already experienced a crisis that led to AI layoffs is Avishai Abrahami, founder and CEO of Wix, who also serves on the board of monday.com and was one of its first investors.. Wix allows users to build and manage websites. Last year, as part of the understanding that change was needed due to the rise of AI, the company made the very successful acquisition of Base44, which is involved in Vibe Coding, allowing users to create digital works using natural language, without the need for code. Base44 has become the engine of Wix's growth, with annual recurring revenue (ARR) that has jumped from a few million dollars to about $150 million in a year. With Wix too, investors have not been convinced, and the company's stock has fallen 67% in the past year (although it has recovered slightly from the recent low), with the main concern being that AI would harm the company's traditional activities and make them redundant. Abrahami recently told the US podcast 20VC, "I would be happy to say that in three years our team will consist 1,000 employees at Base44, 1,000 employees at Wix, and all the rest will be AI agents, but I'm not so sure that's possible. We all give too much credit to AI and what it can do." Wix cut 20% of its employees this year, about 1,000, layoffs that were explained both by the development of AI, which requires it to become a leaner and faster company, and also by the strengthening of the shekel. The layoffs at Fiverr An Israeli company that has made significant changes and cuts in response to the development of AI almost a year ago is Fiverr (NYSE: FVRR). The company, led by founder CEO Micha Kaufman, announced last September that it would lay off 250 employees, about a third of Fiverr's workforce. At the time Kaufman explained, "The speed at which technology is changing, and the possibilities it provides, are amazing and require new thinking and greater speed to stay ahead... We can and should dream bigger, and build Fiverr faster as an AI-focused infrastructure." To this end, it was decided to make the company leaner, with fewer management layers, or as Kaufman defined it, "return to a startup state." Investors in Fiverr also seem to prefer to wait for the picture to become clearer, and the stock has fallen by about 58% in the past year. These Israeli examples are of course part of a much broader picture. According to "TechCrunch," in the first half of 2026 alone, the number of layoffs worldwide reached 165,000. Oracle, for example, laid off 13% of its employees (21,000) and Microsoft announced 4,800 layoffs, after last year it had already explained the layoff of thousands of employees as a need to cut expenses, to adapt to rapid technological change and the large investments required for AI. Software company Salesforce laid off 4,000 employees in customer support roles last year, and the CEO explained that following the development of AI, it needed fewer employees. Hiring employees again About a month ago, software company Intuit laid off 3,000 employees, which constitutes 17% of its workforce, due to a business focus on AI-based products. However, the company's CEO Sasan Goodarzi told "CNBC," "This has nothing to do with AI. The goal is to become more effective." This may be part of a shift in tone on AI layoffs. Recent articles are beginning to question the moves that have been made, for example, a CNBC article said that companies are starting to reconsider focusing on AI at the expense of employees. A Ford VP said in the article that the company is rehiring engineers: "AI is a fantastic tool, but only as good as the information you train it on." An IBM executive said there that if entry-level employees are not hired, "What will happen in 3-5 years? The well will run dry." "Forbes" also found that some companies are starting to rehire human workers. "The company first announces that it is going to use AI to do the work. The number of employees is reduced. Then 6-12 months later it turns out that the AI has only successfully performed 60% of the tasks, and the company rehires the people," it said. It's hard to say there's a change in trend, but it seems that skepticism remains, both as companies reduce employees and as they invest in AI, and in the capital market at least, investors are waiting for more clarity.