The AI transition is no longer changing software products. It is reshaping the companies that build them.
Monday.com is cutting about 20% of its global workforce, eliminating roughly 620 jobs as the Israeli software company overhauls its organization around artificial intelligence. The layoffs come as the company shifts its focus from software that helps people manage work to a platform where employees and AI agents complete work together. Management says the move is not about replacing workers with AI or boosting short-term profits. It is about rebuilding the business for a market where customers increasingly expect software to act, not just organize.
The restructuring was formally disclosed in a filing with the U.S. Securities and Exchange Commission (SEC), where Monday.com said the plan is intended to reshape the company around its long-term AI strategy rather than serve as a temporary cost-cutting exercise.
“On July 22, 2026, monday.com Ltd. (the “Company”) initiated a restructuring plan (the “Plan”) to align the Company’s organizational structure with its strategic focus on the AI Work Platform. The Plan reflects the Company’s ongoing transformation of its product, marketing, and go-to-market strategy and is intended to support a leaner, more focused operating model as the Company continues to invest in its AI-driven growth strategy. The Plan includes a reduction of approximately 20% of the Company’s current workforce. The Company expects to continue hiring in key strategic areas throughout 2026.”
The announcement places Monday.com among a growing list of established software companies rethinking how they are built as AI changes enterprise software at an unprecedented pace.
Monday.com says the organization built for SaaS no longer fits the AI era
In a letter to employees, co-founders Roy Mann and Eran Zinman described the decision as the hardest in the company’s history. Around 620 employees worldwide will lose their jobs as part of a broader restructuring that reaches far beyond headcount.
“We entered a new era where AI is transforming the role of software, creating the greatest opportunity our industry has ever seen,” the founders wrote. “We have a new market to capture. Without a fundamental change in how we operate, we will not be able to compete and win that market.”
The company argues that adding AI features to existing products is no longer enough. Executives believe the internal structure that helped Monday.com grow into one of the leading workplace software platforms now limits its ability to compete against a new generation of AI-native products.
“Over the past nine months, we have shifted our core vision, moving from managing work to doing the work for our customers, with people and AI agents working together in one workspace,” the founders said.
That vision requires a different company, they explained.
“It became clear that changing our strategy and product is not enough. The organization we built for our previous chapter is not the organization that fits the new AI era.”
The company says AI is not replacing employees
Layoffs tied to AI often raise questions about automation replacing workers. Monday.com sought to address that issue directly.
Management told employees the restructuring was not intended to reduce costs by replacing staff with artificial intelligence.
“Improving margins was not the purpose of this decision,” the company wrote. “We intend to reinvest the vast majority of the savings in our people, our products, AI, and future growth.”
In follow-up questions shared internally, leadership rejected the idea that the company’s own AI tools had made employees unnecessary.
“No. While we are seeing significant value from AI internally, this decision was not made to reduce costs or replace people with AI,” the company said. “We see internal AI adoption as an accelerator of our growth.”
Instead, executives said the company is flattening management layers, creating smaller autonomous teams, and redirecting investment into product development, customer implementation, and sales functions tied to its AI strategy. Monday.com expects to continue hiring in selected areas that support those priorities.
A broader shift across enterprise software
Monday.com’s restructuring reflects a larger change unfolding across the software industry.
For nearly two decades, enterprise software companies competed by helping organizations manage projects, customer relationships, documents, finance, and communication. AI agents are beginning to change that equation. Instead of helping employees organize work, software is starting to perform portions of the work itself.
That shift creates both opportunity and risk.
Established software vendors already have millions of users, valuable enterprise data, and trusted customer relationships. Those advantages could make them strong platforms for AI agents. At the same time, startups built around AI from day one are challenging traditional software categories with products that promise to complete tasks instead of simply tracking them.
Investors are watching closely to see which companies can translate AI adoption into meaningful revenue growth before customers begin replacing conventional software subscriptions with AI-first alternatives.
Monday.com is far from alone. Enterprise software, cloud computing, networking, payments, and cybersecurity companies have all reduced headcount over the past two years as they redirect spending into AI infrastructure, research, product development, and sales.
Why it matters
Monday.com’s announcement highlights a shift that extends well beyond one company or one round of layoffs. The AI race is changing how software is built, sold, and staffed. For many enterprise software vendors, success may depend less on adding AI features and more on rebuilding their organizations around a future where AI agents work alongside people and, in some cases, perform the work customers once did themselves.
