Monday.com lays off 630 employees: a strategic pivot toward AI

What happened?

On July 22, 2026, Monday.com announced the layoff of approximately 630 employees, representing 20% of its workforce. The company stated it aims to 'support a more agile and focused operating model' while concentrating its efforts on its AI-powered work platform, known as the AI Work Platform. According to TechCrunch, the decision is part of a restructuring to prioritize AI as the core of its offering. This announcement follows the company's report of $729 million in revenue for 2025, a 31% year-over-year growth, but with a slowdown in new customer acquisition, which grew by only 12% in the last quarter. The company, founded in 2012, had increased its headcount by 25% during 2024, reaching 3,150 employees, but is now reversing that expansion to focus on operational efficiency.

Why does it matter?

This move is not isolated. In recent years, companies like Salesforce, Google, and Microsoft have carried out mass layoffs while redirecting resources toward AI. Salesforce cut 10% of its staff in 2023, Google eliminated 12,000 positions in 2023, and Microsoft cut 10,000 jobs that same year, all to bet on artificial intelligence. Monday.com, with over 200,000 customers and a market capitalization of $12 billion, seeks to compete with tools like Asana, Trello, and ClickUp, which are also integrating AI capabilities. Asana launched its AI assistant in 2024, ClickUp incorporated predictive automation features, and Trello improved its integration with AI-based productivity tools. The decision underscores that for software companies, AI is no longer an option but a strategic necessity to remain relevant. According to a Gartner report, 70% of software companies plan to reallocate at least 30% of their R&D budget toward generative AI by 2027. Furthermore, the AI-powered project management software market is projected to grow from $5.2 billion in 2025 to $11.3 billion in 2030, according to MarketsandMarkets. Monday.com, which had already acquired the AI startup Smooch.io in 2023, seeks to position itself as a leader in this segment.

Consequences for employees and the market

The 630 affected employees join the more than 200,000 layoffs in the tech sector so far in 2026, according to data from Layoffs.fyi. For workers, this implies a reorientation toward skills in AI and automation. A McKinsey study estimates that by 2030, the demand for AI-related roles will grow by 30%, while administrative and support positions could be reduced by 15%. The laid-off Monday.com employees will receive severance packages including 16 weeks of base salary, extended health benefits for six months, and outplacement support, the company reported. For the market, Monday.com seeks efficiency: with a smaller workforce but with AI tools, the company expects to maintain or even increase its productivity. Customers could benefit from smarter features, such as workflow automation, predictive analytics, and personalized virtual assistants. However, there is a risk that the quality of customer service may be affected, as the support department was reduced by 15%. Competitors like Asana have capitalized on the announcement, offering discounts to Monday.com customers looking to migrate.

What should readers know?

• Monday.com is not the first nor will it be the last: the trend of cutting jobs to invest in AI is global. In 2026, companies like Zoom, PayPal, and Spotify also announced significant layoffs to fund AI developments.
• The company assures that the layoffs will not affect service quality but will allow for faster innovation. However, some analysts warn that staff reductions in key areas like sales and support could slow platform adoption among enterprise clients.
• Investors have reacted with caution: shares fell 3% after the announcement, although some analysts see long-term potential. According to a Morgan Stanley note, the company could save up to $80 million annually in labor costs, which could be reinvested into AI R&D.
• For users, the new AI features could translate into greater automation and personalization. Monday.com has already announced that its AI Work Platform will include automatic task generation, schedule optimization, and sentiment analysis in comments. These features are expected to be available in the fourth quarter of 2026.
• The historical context shows that this restructuring follows the pattern of other tech companies that have prioritized AI. In 2023, IBM announced a hiring freeze for roles that could be replaced by AI, affecting 7,800 positions. More recently, in 2025, Upwork laid off 15% of its staff to focus on its AI-powered services marketplace.

“We are building a work platform that leverages AI to help teams be more productive. This change allows us to focus on what really matters,” stated a Monday.com spokesperson.

In summary, the mass layoff at Monday.com is a symptom of an industry reconfiguring itself around artificial intelligence. The question is not whether more companies will follow this path, but when and how they will do it. For workers, the lesson is clear: adaptation to AI is no longer optional. For investors and customers, Monday.com's bet could translate into sustained long-term growth, but not without short-term risks. The company will need to prove that its efficiency and AI-focused strategy does not sacrifice user experience or the ability to innovate in other areas.