Monday, Wix, and Fiverr Cut Jobs Amid AI Disruption and Falling Stock Prices
In recent years, many technology companies, especially in software, have implemented significant layoffs citing advancements in artificial intelligence (AI) as a key factor. These "AI layoffs" often involve substantial workforce reductions in a single round, driven by AI's ability to replace or accelerate human work, the need to reallocate resources for AI investments, or threats to existing business models. This trend has been dubbed the "SaaSpocalypse," reflecting the sharp decline in SaaS (Software as a Service) company stocks amid fears that AI could disrupt or obsolete their offerings.
Israeli software companies have also been affected. Monday.com announced on Wednesday it would cut 630 jobs, about 20% of its workforce, with 55% of its 1,729 employees based in Israel. The company, led by co-founders Roy Mann and Eran Zinman, is shifting from a work management platform to one that integrates AI agents to collaborate with humans, changing its pricing model to credit-based consumption. Despite these changes, Monday's stock has dropped roughly 75% over the past year, trading at a market value of $3.1 billion.
Wix, whose CEO Avishai Abrahami also serves on Monday's board, experienced a similar crisis. After acquiring Base44, an AI-driven digital creation platform, Wix saw its annual recurring revenue soar but still faced a 67% stock decline last year. Wix laid off about 1,000 employees (20%) this year, attributing cuts to AI-driven transformation and currency pressures. Abrahami expressed skepticism about AI's full potential to replace human teams in the near future.
Fiverr, another Israeli company, cut about one-third of its staff (250 employees) last September to accelerate its AI-focused transformation and streamline operations. Its stock has fallen approximately 58% in the past year. Globally, AI-related layoffs have surged, with companies like Oracle, Microsoft, Salesforce, and Intuit reducing thousands of jobs to adapt to rapid technological changes and AI investments.
However, some industry voices and reports suggest a growing skepticism about the extent to which AI can replace human workers. Companies are reconsidering their AI strategies, with some rehiring engineers after realizing AI can only handle a portion of tasks effectively. This cautious approach reflects ongoing uncertainty in the market and among investors, who await clearer outcomes from AI integration alongside workforce changes.
