Monday.com is eliminating about 20% of its global workforce, laying off approximately 620 employees. The company cited a necessary structural shift toward an AI-driven operational model as the reason for the significant staff reduction. Co-founders Roy Mann and Eran Zinman announced the decision in a letter to employees, describing it as the most difficult taken since the company's founding.
The company emphasized that these layoffs are not intended as a cost-cutting measure or a direct replacement of human employees with artificial intelligence. Instead, Monday.com is adapting its organizational framework to align with a broader industry shift where software increasingly integrates with human teams to perform tasks. Over the past nine months, Monday.com has focused on evolving from a platform that manages work to one that actively performs work for clients, utilizing both employees and AI agents. The founders stated that the organizational structure developed during the Software-as-a-Service boom is no longer suitable for this new AI era.
To support this pivot, Monday.com plans to reduce management layers and establish smaller, more autonomous teams. The company aims to reinvest the majority of the savings generated by the restructuring into product development, internal AI technologies, and future growth initiatives. In internal communications, leadership clarified that the decision was not driven by internal AI adoption but rather to eliminate organizational friction and complexity that had slowed down projects.
This move by Monday.com aligns with a broader trend observed across the technology sector, where numerous companies have cited artificial intelligence as a factor in their workforce reductions. Other companies, including Snap, Block, Oracle, and Cisco, have also announced layoffs, attributing them to AI-driven efficiencies, organizational flattening, or a reallocation of resources towards AI infrastructure. For instance, Oracle noted in a regulatory filing that the adoption of AI technologies has resulted in workforce reductions, with its headcount falling by approximately 13% over the past year. Similarly, Cloudflare announced significant role reductions to reorganize for the "agentic AI era," citing a substantial increase in AI usage.
The restructuring at Monday.com signals a strategic re-evaluation of how software companies can compete and grow in an AI-influenced market. The company is betting that AI-driven automation and enhanced operational models can absorb tasks previously handled by human teams, allowing for new revenue streams that offset traditional growth patterns. The outcome of this strategy is expected to inform how other mid-market SaaS providers approach AI integration and organizational adaptation. Monday.com is preparing to launch its AI suite in the fourth quarter, with its third-quarter financial results expected in early October to provide an initial indication of the restructuring's impact.