What happened
Monday.com announced layoffs of about 20% of its workforce, or just over 600 employees, in an SEC filing this week. The company framed the cuts as part of a restructuring tied to its "AI-driven growth strategy" and a shift toward a "leaner, more focused operating model," though co-founder Eran Zinman told employees the move was "not made to reduce costs or replace people with AI." The company expects restructuring charges of $45 million to $55 million but still projects up to 20% year-over-year revenue growth for 2026.
Why it matters
Monday.com joins a wave of tech layoffs across the industry; U.S. tech companies have slashed nearly 140,000 jobs since the start of this year, with Amazon, Oracle, Meta, and Microsoft alone accounting for almost 50,000 of those cuts as they invest hundreds of billions into AI data centers. Notably, Financial Times analysis 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 announcements, suggesting investors are skeptical of the AI-justification narrative.
What to watch
Some tech firms are shifting headcount rather than erasing it entirely—Meta moved roughly 7,000 employees into AI-focused roles even as it laid off 8,000 others, and IBM is tripling entry-level hiring for AI and hybrid-cloud roles. AI-focused companies like Anthropic and OpenAI are hiring rapidly, potentially absorbing some of the talent shed elsewhere in the industry.
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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.
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