Wix lays off 1,000 workers as AI capabilities and currency pressures force major restructuring

Wix Layoffs Hit 1,000 Employees in Largest Workforce Reduction

Website building company Wix announced it will lay off approximately 1,000 employees, representing roughly 20% of its workforce, in what CEO and co-founder Avishai Abrahami described as one of the hardest decisions he has had to make. The company employed 5,277 people at the end of March 2026, with more than 60% based in Israel 2

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. Abrahami announced the workforce reduction on May 28 in a message posted publicly on X and sent simultaneously to all staff, marking the largest round of cuts in company history 2

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. Affected employees will receive what Abrahami described as personally curated separation packages and will be contacted individually 4

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Shekel-Dollar Exchange Rate Pressures Mount

The first major driver behind the Wix cuts 20% of workforce decision stems from exchange rate pressures created by the strengthening Israeli shekel against the US dollar. The shekel has strengthened sharply against the dollar over the past two years, rising roughly 14% in 2025 and a further 7% in the first five months of 2026 2

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. For a company that earns the vast majority of its revenue in dollars but pays the majority of its workforce in Israeli shekel, this creates a structural cost increase. Abrahami explained that in the past few quarters, the exchange rate between the shekel and the US dollar has shifted significantly, creating structural pressure on the company's ability to operate at its current scale 3

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. Israeli engineering salaries have risen 15% to 20% in dollar terms within a few months, making Israeli developers among the most expensive in the world, sometimes more costly than their counterparts in Silicon Valley 2

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Fast Evolution of AI Capabilities Reshapes Operations

The second reason Abrahami cited for the restructuring is the fast evolution of AI capabilities. He described the current moment as the most significant shift in how companies are built since the invention of modern programming languages in the 1970s 1

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. "This is not just about adopting new tools - it is about rewiring how companies are built, how they think, how they manage and how they operate," Abrahami wrote 1

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. The company is introducing AI-native roles including positions called xEngineer, a design-first engineering role built around AI-native ways of working, and Creators, a broader category for employees working primarily with AI tools 2

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. Wix is moving to a structure with fewer levels between leadership and junior team members, which means faster decisions and clearer ownership but also a smaller number of people 4

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Stock Collapse and Earnings Miss Precede Cuts

The Wix layoffs follow a brutal period for the company's stock, which has fallen more than 50% in 2026 2

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. Shares plummeted 27% on May 13 after the company reported first-quarter results that missed Wall Street expectations. Revenue rose 14% year on year to $541 million, but Wix posted a net loss of $57.5 million after several profitable quarters 2

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. The earnings miss was significant, with adjusted EPS at $0.68 compared with Wall Street forecasts of $1.22 3

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. Operating expenses as a percentage of revenue surged from 21% in Q1 2025 to 35% in Q1 2026, a trajectory that alarmed investors 2

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AI Jobs Apocalypse Continues Across Tech Sector

The workforce reduction at Wix adds to mounting evidence of what many are calling an AI jobs apocalypse. There have been almost 116,000 layoffs in the tech world so far in 2026, quickly approaching the 124,000 seen for the entirety of 2025 1

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. A massive percentage of these cuts are tied to AI capabilities, either through direct job replacement or companies redirecting resources toward AI infrastructure. The announcement came just days after OpenAI boss Sam Altman expressed excitement that the AI jobs apocalypse he predicted last year had not come to pass 1

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. A recent survey of almost 1,000 executives found that 99% expect to make some reduction in headcount in the next 24 months 1

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. Other companies have made similar moves in recent months, with ClickUp cutting 22% of its staff and Block laying off over 4,000 people earlier this year, with former Twitter boss Jack Dorsey saying it was better to eliminate jobs at once rather than slowly over time as automation replaced workers 1

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What This Means for an AI-First Future

Wix becomes the first major victim of what analysts are calling the "shekel-dollar crisis," with many noting that companies based in Israel with returns in dollars might be hit hard by the current strengthening of the Israeli currency 4

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. Despite the job cuts, the company will continue to hire for new AI-native roles designed for an AI-first future 3

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. The irony in this AI and currency restructuring is that companies spending millions and billions on AI still aren't seeing meaningful returns. A survey in January found more than half of participating CEOs said AI adoption had not increased revenue or reduced costs 1

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. As Wix moves forward with this restructuring, the tech industry will be watching to see whether this leaner, AI-focused approach delivers the competitive advantages Abrahami promises, or whether it becomes another cautionary tale of premature workforce reduction in pursuit of automation that hasn't yet proven its value.