Monday.com lays off 20% of workforce in AI pivot
The company restructures to align with its new AI-driven strategy.
1Monday.com's AI-focused transformation
Monday.com is laying off 20% of its global workforce as it transitions to an AI-powered work platform. This move stems from the need to create a leaner operational model aligned with its AI-driven growth strategy. Co-founder and co-CEO Eran Zinman described this as the most difficult decision the company has made since its inception.
2The broader SaaS industry trend
Monday.com's layoffs are part of a wider trend in the SaaS sector. Investors are selling company shares amid concerns that AI agents could make traditional SaaS tools obsolete. During this so-called 'SaaSpocalypse,' Monday.com's market capitalization has fallen to about $3 billion, far below its pandemic-era peak.
3Financial impacts and restructuring costs
The company expects restructuring costs between $45-55 million, with $30-35 million allocated to severance and employee benefits, and the remainder for office space impairments. Most costs are expected in the second half of 2026. Monday.com stated it will continue hiring in strategic areas while making cuts elsewhere.
4Industry parallels
Monday.com isn't alone in reducing staff due to AI competition. Israeli software company Wix cut 20% of its workforce in May, while Atlassian eliminated 1,600 jobs in March while replacing its CTO. The sector shows a pattern of record revenues alongside significant headcount reductions and redirected investments toward AI.
5New organizational structure
Zinman emphasized that the changes aren't about cost-cutting or replacing humans with AI. The company is creating a flatter structure with fewer management layers, more autonomous teams, and a new go-to-market model bringing staff closer to customers. The majority of savings will be reinvested in people, products, and future growth.
6Strategic shift or AI washing?
Monday.com reported Q1 revenue of $351 million, up 24% year-over-year. But in a market where AI serves as both justification for layoffs and product focus, questions remain whether this represents genuine transformation or what OpenAI's CEO calls 'AI washing' - using AI to justify decisions driven by other pressures. Whether the market buys this framing remains to be seen.
Original article: The Next Web — Monday.com çalışanlarının %20'sini işten çıkarıyor