Monday.com is preparing to eliminate 20% of its workforce in a restructuring that management is framing as an "AI-driven growth strategy," according to an internal memo to employees reported by Business Insider.

The workforce reduction, communicated by the company's co-CEO, ranks among the more aggressive cuts announced by a publicly listed software vendor in the current cycle. By placing "AI-driven growth strategy" in quotation marks, Business Insider signals that leadership wants the layoffs read as a reallocation rather than a retreat.

What does the memo say?

Business Insider obtained the co-CEO's note to staff, which positions the cuts as part of a strategic pivot. Several details have not been publicly disclosed:

• The total number of roles eliminated
• The functions and geographies facing the heaviest reductions
• The expected restructuring and severance charge
• The execution timeline

The full text of the memo, once published, will clarify whether the move is a one-time reset or the first step in a longer contraction.

Why would AI justify a 20% headcount cut?

Public software companies have deployed two recurring arguments to defend workforce reductions over the past 18 months:

• Productivity gains. Coding assistants, automated support tooling, and AI-augmented sales platforms have raised output per employee.
• New revenue lines. AI features open larger addressable markets, justifying capital reallocation toward model development, data infrastructure, and GPU spending.

Monday.com's framing aligns with the second argument. Tying the cuts to "growth" directs investor attention toward the capital that will fund AI initiatives, not the headcount that will leave.

Where does Monday.com sit in the market?

Monday.com sells a work management platform used by teams to plan projects, track deliverables, and automate workflows. The company is listed on Nasdaq under the ticker MNDY and has grown rapidly since its 2021 IPO, adding staff in Israel, the United States, and Europe through 2023 and 2024. A 20% reduction would mark a sharp reversal of that trajectory.

The cut would sit alongside reductions announced by other publicly listed software peers in 2024 and 2025, several of which have similarly cited AI as both the trigger and the remedy.

What investors will look for

The next quarterly disclosure will provide the first hard data on the move. Analysts will focus on:

• Restructuring and severance charges
• Updated operating margin guidance
• Capital expenditure plans, particularly AI infrastructure
• The AI product roadmap that justifies the reallocation

Share price reaction will hinge on whether management treats the cuts as a one-quarter charge or a permanent reset to the cost base.

What happens next for employees?

The memo's internal distribution means staff at the company's Tel Aviv headquarters, New York office, and other regional centers will receive direct communication on severance terms, transition support, and internal mobility options. Business Insider reported that the co-CEO's note frames the change as a strategic choice rather than a financial concession.

The full memo, when it surfaces, will determine the answer to the most pressing question for remaining staff: which functions the company considers AI-replaceable, and which it considers central to the next phase of growth.