Wix had 5,277 employees at the end of Q1, and by Thursday morning about 1,000 of them found out they were on the wrong side of the math.
CEO Avishai Abrahami announced the cuts on X early Thursday, where he pointed at two things at once: artificial intelligence and the currency markets.
Abrahami said the way companies are built has changed more in the last few years than at any point since modern programming languages showed up in the 1970s.
In plain English: AI is doing more of the work, and Wix needs fewer people to do the rest.
He said the company will move to fewer layers of leadership so it can make decisions faster, which is corporate-speak for "managers are part of the cut."
Wix is joining the wave of tech companies using AI as the reason for major cuts. Block cut about 4,000 jobs in February with CFO Amrita Ahuja saying the company wanted to "move faster with smaller, highly talented teams using AI."
Cisco followed with a 5% cut this month, and Meta laid off thousands last week to fund its own AI build-out.
What sets Wix apart is the size of the cut, because a 20% reduction in headcount in one announcement is steeper than most of its tech peers.
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The second reason is the one investors might want to focus on more. Wix is based in Israel and pays most of its costs in Israeli shekels, while it earns most of its revenue in U.S. dollars.
When the shekel strengthens against the dollar, every paycheck and office bill costs Wix more in real terms.
Abrahami said this has put "structural pressure" on the company's ability to operate at its current scale.
The exchange rate problem is structural. Wix went public in 2013 and built its operating model when the shekel was much weaker against the dollar, and years of currency strength have made every cost line item more expensive in dollar terms.
Put simply: AI is the story Wix wants to tell, while the currency math is the story that forced the decision.
The stock barely budged, with shares trading close to flat Thursday after the cuts were announced, which suggests investors were either expecting it or had already priced it in.
The real test is the next earnings call. If Wix's margins improve and growth holds, AI gets the credit, but if both slip, the shekel will get the blame.
Wix has spent the last two years pushing into AI website builders, partly to fend off competition from Shopify and Squarespace, and partly to justify higher prices to investors. The cuts make that AI bet harder to back out of.
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