Monday.com had 3,155 employees as of its 2025 annual report.
The company says the layoffs are not about cutting costs or replacing people with AI. Instead, management wants to reorganize around what it calls an "AI Work Platform" strategy, citing an "AI-driven growth strategy."
"We entered a new era where AI is transforming the role of software, creating the greatest opportunity our industry has ever seen," co-CEO Eran Zinman wrote in a note published to LinkedIn. "Without a fundamental change in how we operate, we will not be able to compete and win that market."
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Monday.com intends to keep recruiting for roles aligned with its new priorities. According to Monday.com, nearly all of the money saved from the layoffs will be redirected toward employees, product development, artificial intelligence, and long-term expansion.
The broader software industry is facing something analysts have started calling the "SaaSpocalypse" - a term for the anxiety that artificial intelligence and so-called "vibe coding" might reduce businesses' dependence on such platforms.
The move comes as many SaaS companies face intensifying pressure from investors to show how they are integrating AI into their products. Monday.com, which makes project management and work operating system software, has seen its market value collapse over the past year - a drop of about three-quarters - amid fears that AI-powered tools could make traditional offerings less essential. By restructuring around an AI-first approach, the company hopes to reclaim momentum in a landscape where even established players are racing to adapt. The layoffs, though painful, are framed as a proactive step rather than a reaction to financial distress, with Zinman emphasizing that the company will reinvest heavily in its new strategic direction.
Monday.com's decision to cut 620 jobs represents a significant reduction in its workforce, but the company insists it is not a cost-saving measure. Instead, the reorganization is intended to position the company as a leader in AI-driven work platforms, a space it believes will define the next era of software.
Monday.com's pivot reflects a wider upheaval in the software-as-a-service sector. For years, companies like Monday.com grew rapidly by selling subscription-based tools for team collaboration and workflow management. But the emergence of large language models and generative AI has disrupted that model, enabling users to automate tasks that previously required multiple software subscriptions.
Competitors such as Asana, ClickUp, and even tech giants like Microsoft and Google are racing to embed AI assistants into their platforms. The term "SaaSpocalypse" captures the fear that the entire SaaS business model - built on per-seat licensing - could be undermined if AI handles the work of several employees. Monday.com's decision to cut 20% of its staff while reinvesting the savings into AI development is a bet that the company can transform itself rather than be left behind.
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