Israeli software giant NICE is preparing to lay off approximately 500 employees worldwide, representing about 5% of its global workforce, as it restructures its operations in response to the rapid transformation of the customer service industry by artificial intelligence. The cuts are expected to have minimal impact on the company's employees in Israel, according to estimates.
NICE employs approximately 10,000 people worldwide, including around 1,000 in Israel. In July, CEO Scott Russell pledged that the company would not reduce its Israeli workforce, and the latest restructuring is expected to largely spare its operations in the country.
NICE CEO Scott Russell alongside the company's offices
(Photo: Shutterstock, Brent Lewin/Bloomberg)
The company, which develops software for managing customer service operations and contact centers, has faced mounting challenges over the past two years as AI technology reshapes its core market. NICE shares have fallen 17% over the past year, although they have remained relatively stable since the beginning of 2026. The company is currently valued at approximately $6.5 billion, far below its peak valuation of around $20 billion during the COVID-19 pandemic.
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Under Russell's leadership, NICE has been pursuing two major strategic changes. The company is considering selling its Actimize division, which specializes in financial fraud detection and anti-money laundering software and operates outside its core customer service business.
At the same time, NICE has acquired German startup Cognigy for approximately $1 billion. Cognigy develops AI agents capable of conducting conversations with customers and handling service tasks independently, without the involvement of human representatives. The technology is intended to help NICE's customers streamline their service operations and reduce their reliance on human workers.
NICE provides customer service and customer relationship management software to approximately 25,000 clients worldwide, including 85% of Fortune 500 companies. Its customers span multiple industries and geographic markets, including hotel giant Marriott, supermarket chain Lidl, German airline Lufthansa and entertainment company Disney.
The company is scheduled to publish its third-quarter financial results on Wednesday, November 4, after issuing relatively conservative guidance amid growing competition from emerging AI solutions. NICE expects quarterly revenue of $780 million to $790 million, with adjusted earnings per share projected at $2.73 to $2.83.
Following its previous quarterly results, NICE said customers had delayed signing contracts during the first half of 2026. Major clients, including financial institutions, were increasingly choosing to assess developments in AI before committing to significant investments. The company expects deal activity to accelerate during the second half of the year, supporting stronger revenue growth.
NICE is expected to finish 2026 with annual revenue exceeding $3 billion for the first time in its history. However, earnings per share are projected to decline by nearly $1 to approximately $11, despite an aggressive share buyback program.
The company said in a statement that "NICE is making changes to its organizational structure and resource allocation to better serve customers deploying AI-powered customer experience solutions at enterprise scale. As part of this plan, we expect to reduce our global workforce by approximately 5%.
"This is a necessary step to position NICE for the future and ensure that we achieve our strategic objectives. These are difficult decisions affecting valued colleagues, and our immediate priority is to speak directly with the employees impacted by this move and provide them with full support during the transition."