Entrée Capital Co-Founder Defends Monday.com Layoffs Amid AI Shift and Market Challenges
Avi Eyal, co-founder of Entrée Capital, which manages $1.5 billion and famously profited over $1 billion from its investment in software company Monday.com, addressed recent controversies surrounding the firm. The company recently laid off 620 employees globally, including 350 in Israel, while simultaneously proposing to double the annual compensation of Monday.com’s co-CEOs, Roy Man and Eran Zinman, to $14 million. Eyal, a board member who supported both decisions, explained that the layoffs were necessary to adapt to the evolving AI-driven market and maintain competitiveness. He cited the example of Airtable, which lost significant value after failing to pivot to AI, to justify Monday.com’s strategic changes.
Despite Monday.com’s stock dropping 40% this year, Eyal expressed strong confidence in the company’s future, highlighting its billion-dollar revenue, satisfied customers, and new AI-based products. He emphasized that the company is reinventing itself to thrive in the AI era, though the market remains skeptical. Regarding the broader tech sector, Eyal noted that layoffs reflect a shift in required skills, with increased demand for forward deployed engineers who assist clients in adopting AI technologies. He dismissed the idea that layoffs are primarily due to the strong shekel, stressing instead the impact of AI adoption.
Eyal also commented on the Israeli government’s plan to support the tech sector amid currency challenges, suggesting subsidies are difficult and that strategic investments in emerging fields like quantum computing are more beneficial. He acknowledged a decline in new startups, attributing it to talent being absorbed by large companies and political uncertainty, but predicted a positive shift if there is a government change after elections.
Reflecting on his previous warnings comparing Israel’s social divisions to apartheid-era South Africa, Eyal expressed concern about Israel becoming a global pariah facing sanctions. Nevertheless, he remains optimistic about Israeli innovation and the resilience of its tech ecosystem. He revealed increased involvement in defense tech investments following recent conflicts and highlighted the importance of international cooperation, especially with Ukraine. Eyal concluded by describing himself as a realist who sees significant challenges but also a fearless new generation driving Israel’s future.
