Monday.com Cuts Over 600 Jobs to Adapt to AI Era Amid Stock Decline

Monday.com, the Israeli software company, announced plans to lay off approximately 620 employees globally, including around 350 in Israel, representing about 20% of its workforce. The decision, revealed on Wednesday, is part of a broad organizational and strategic shift aimed at aligning the company with the emerging AI-driven work model. Co-founders Roy Man and Eran Zinman explained that over the past nine months, the company has transitioned from focusing solely on work management to integrating AI agents working alongside humans, with the system automating many client tasks. This transformation necessitated changes in product strategy and customer service, prompting the workforce reduction.

The layoffs are not intended to improve profitability but to reallocate resources towards human capital, AI technologies, and growth initiatives. Monday.com also committed to supporting departing employees with generous assistance packages and job placement help. Structural changes include flattening management layers to empower teams, creating more autonomous small groups with broader responsibilities, and implementing a new Go-to-Market model tailored to AI adoption by customers.

Despite the layoffs, Monday.com reported strong financial results for Q1 2026, with revenues rising 24% year-over-year to $351.3 million and a net profit of about $28 million. However, its Nasdaq stock price has plummeted roughly 83% from its peak, reflecting investor reevaluation of SaaS companies amid shifting corporate budgets toward AI infrastructure. Monday.com’s move follows similar cuts by other tech firms like Fiverr, Artlist, and Lightricks, which have also reduced staff as AI reshapes workflows and reduces the need for large teams.

This wave of layoffs signals a broader industry trend toward leaner, more agile companies built around AI capabilities. New startups are emerging with minimal staff but significant revenue, demonstrating the changing landscape. While Monday.com views this as a new beginning and does not plan further cuts, other companies may follow suit, potentially leading to thousands of job losses in Israel’s tech sector. The industry is adjusting to a future where AI agents replace many traditional roles, and hiring is now more cautious and targeted, focusing on irreplaceable positions like sales.

Overall, Monday.com’s restructuring reflects the tech sector’s adaptation to AI-driven efficiency, marking the end of the era of large workforces and signaling a shift toward smaller, faster, and more technology-integrated companies.