Monday.com cuts 20% of workforce citing AI strategy shift

Monday.com, the Tel Aviv-based work management software company known for its colorful project-tracking boards, announced this week that it will lay off about 20% of its workforce, or just over 600 employees. In an SEC filing, the company attributed the cuts to a "restructuring plan" supporting its "ongoing transformation of its product, marketing, and go-to-market strategy" and shift toward a "leaner, more focused operating model." Crucially, the company cited investment in its "AI-driven growth strategy" as a driver of the restructuring.

Co-founder Eran Zinman addressed the news in a LinkedIn memo to employees, explicitly stating the layoffs "was not made to reduce costs or replace people with AI." Instead, Zinman positioned the move as an organizational adaptation to an "AI-first vision" the company had outlined roughly a year prior when it rebranded around a platform-wide AI initiative. The company expects restructuring charges of $45 million（約72億円） to $55 million（約88億円） but maintains a projection of up to 20% year-over-year revenue growth for 2026. Monday.com operates two U.S. offices.

Monday.com's announcement occurs within a much larger wave of tech industry layoffs. According to Financial Times analysis, U.S. tech companies have eliminated nearly 140,000 jobs since the start of this year. Amazon, Oracle, Meta, and Microsoft alone account for almost 50,000 of those cuts, with companies funneling hundreds of billions of dollars into AI data center construction. Yet the market response to such announcements has been notably cool: Financial Times research found that companies citing AI as a factor in job cuts have underperformed the Nasdaq by almost 10% in the 30 trading days following their public announcements.

The full picture is more nuanced than simple cuts, however. AI-focused companies like Anthropic and OpenAI are hiring at pace, potentially absorbing some of the talent released elsewhere. Within some of the largest companies making cuts, headcount is shifting rather than disappearing. Meta, for instance, moved roughly 7,000 employees into new AI-focused roles even as it laid off 8,000 others earlier this year. IBM similarly announced it is tripling entry-level hiring for AI and hybrid-cloud roles alongside recent workforce reductions.

Monday.com's announcement reflects a broader pattern in the tech industry: companies are using AI strategy as justification for significant workforce reductions. The article notes that U.S. tech companies have cut nearly 140,000 jobs since the start of this year, with four major firms—Amazon, Oracle, Meta, and Microsoft—responsible for almost half of those eliminations. These cuts coincide with massive capital deployment into AI infrastructure, as companies funnel hundreds of billions into data center buildouts.

However, the market's reaction suggests skepticism about whether AI truly necessitates layoffs at this scale. Financial Times research shows that companies announcing AI-linked cuts underperformed the Nasdaq by almost 10% over the following month, implying investors question whether these justifications are genuine or merely convenient cover for cost reduction. This contradiction—companies insisting the layoffs are strategic repositioning rather than cost-cutting, yet the market treating the announcements as bad news—hints at a credibility gap.