Nice Systems to Lay Off 500 Employees Globally, 5% of Workforce

Nice Systems is implementing a global workforce reduction of 500 employees, approximately 5% of its total staff. The company, which employs around 10,000 people worldwide, with about 1,000 in Israel, stated that the layoffs will have minimal impact on its Israeli workforce. CEO Scott Russell had previously assured employees in July that the company would not reduce its Israeli staff.

The company, a developer of customer service management systems, has been navigating a period of change over the past two years since Russell took over as CEO, influenced by the rapid advancements in AI. Nice's stock has declined 17% over the last year, though it has stabilized since the beginning of 2026. The company is currently valued at $6.5 billion, a significant drop from its peak of nearly $20 billion during the COVID-19 pandemic.

To adapt to the evolving market, Nice is pursuing a two-pronged strategy. It is considering the sale of its Actimize division, which focuses on financial fraud detection and anti-money laundering, as this is not considered core to its customer service operations. Concurrently, Nice acquired the German startup Cognigy for approximately $1 billion. Cognigy develops AI agents capable of independently managing customer conversations and service tasks, aiming to reduce reliance on human agents.

Nice serves approximately 25,000 customers globally, including 85% of Fortune 500 companies, with clients such as Marriott, Lidl, Lufthansa, and Disney. The company is scheduled to release its third-quarter 2026 financial results tomorrow, having issued a conservative forecast due to market shifts and increased competition from new AI solutions. Nice anticipates revenues between $780 million and $790 million for the quarter, with earnings per share projected at $2.73 to $2.83.

In its previous earnings report, Nice cited delays in closing deals during the first half of 2026, partly because major clients, including financial institutions, were observing AI developments before making significant decisions. The company expects an acceleration in contract closures in the second half of the year, leading to higher growth. If Nice meets its 10% growth target, it is projected to exceed $3 billion in annual revenue for the first time. However, earnings per share are expected to decrease to around $11, despite aggressive share buyback programs.

A company statement explained the organizational changes and resource reallocation are intended to support customers implementing enterprise-scale AI solutions for customer experience. "This is a necessary step to position Nice for the future and ensure the achievement of our strategic goals. These are complex decisions affecting valued colleagues, and our top and immediate priority is to speak directly with the employees impacted by this move and provide them with full support during this transition," the statement read.