Israeli software company Monday.com said Wednesday it will lay off about 620 employees, roughly 20% of its workforce, as it restructures around artificial intelligence despite insisting the move is not a cost-cutting measure driven by AI replacing workers.
The announcement comes after the company's shares have fallen about 50% since the start of the year, mirroring sharp declines across the software sector as investors reassess the industry's prospects amid the rapid rise of generative AI.
Employees and executives of Israeli software company Monday.com celebrate the company's Nasdaq debut in New York on June 10, 2021
(Photo: Nasdaq)
Founded in 2012 by Roy Mann and Eran Zinman, Monday.com develops cloud-based software for project management, workflow automation and enterprise collaboration. Over the years, the company has expanded into customer relationship management, customer service and software development tools, and now serves more than 100,000 organizations worldwide.
In a statement, the Nasdaq-listed company said the restructuring is intended to align its organizational structure with its new product strategy after redesigning its platform around AI capabilities.
"The emergence of AI is fundamentally changing customers' expectations of software and opening a new market that creates a significant opportunity for continued growth," the company said.
Monday.com said it plans to flatten its organizational structure by reducing layers of management and creating smaller, more autonomous teams.
The company stressed that the layoffs are not a short-term cost-cutting measure or the result of replacing employees with artificial intelligence. Instead, it said, the restructuring is designed to reallocate resources toward product development, AI technologies and future growth initiatives.
Monday.com went public on the Nasdaq in June 2021 at a valuation of $6.8 billion, becoming one of Israel's largest publicly traded software companies. Its customers include multinational corporations such as Philips, McDonald's and Uber.
The layoffs come about a month after the company announced the creation of Monday Ventures, a new investment arm focused on artificial intelligence startups.
The company said it has allocated up to $200 million for the initiative, with an initial investment commitment of $50 million. The fund will target startups developing AI technologies in areas including AI agents, workflow automation, enterprise data infrastructure and cybersecurity.
When unveiling the venture fund, co-CEO Roy Mann said the company had undertaken "the most significant transformation in its history" about six months earlier by shifting its vision from a work management platform to an AI platform built around autonomous agents capable of performing work rather than simply helping people organize it.
According to Mann, Monday.com has rebuilt its platform around a model in which human employees and AI agents work together, reflecting what the company sees as the next stage in enterprise software.