AI Becomes a Layoff Narrative as Monday.com Joins the List

Lead

AI is no longer just a product strategy for tech companies; it is increasingly part of the language used to explain workforce cuts. Monday.com, the Tel Aviv-based work management software maker, became the latest example after announcing plans to lay off about 20% of its staff, or just over 600 employees.

In its SEC filing, the company tied the restructuring to a broader transformation of its product, marketing, and go-to-market strategy, as well as to a leaner operating model and continued investment in an “AI-driven growth strategy.” Co-founder Eran Zinman told employees the decision was not about cutting costs or replacing people with AI, but about reshaping the organization for an AI-first vision.

Key points

• Monday.com’s cuts are substantial: The company expects $45 million to $55 million in net restructuring charges, even as it continues to project up to 20% year-over-year revenue growth for 2026.
• AI is becoming a common restructuring theme: Microsoft, Oracle, GitLab, Google, Intuit, Meta, Cisco, Cloudflare, GM, Coinbase, and PayPal are among the companies that have connected layoffs, flatter structures, automation, or AI investment in some form.
• The labor shift is uneven: Some roles are being eliminated, while others are being redirected. Meta, for example, moved roughly 7,000 employees into AI-focused roles while laying off about 8,000. IBM has said it is expanding entry-level hiring for AI and hybrid-cloud roles alongside recent cuts.
• Investors are not automatically convinced: According to Financial Times analysis cited by TechCrunch, U.S. tech companies have cut nearly 140,000 jobs since the start of the year. Companies that cited AI as a factor in layoffs underperformed the Nasdaq by almost 10% in the 30 trading days after announcements, suggesting the market is skeptical of some AI-efficiency narratives.

Why it matters

The key question is not simply whether AI is replacing workers. The bigger shift is how companies are redesigning themselves around AI. Many cuts target layers of management, internal operations, support functions, or older business structures, while spending flows toward AI infrastructure, security, cloud systems, and agentic workflows.

GitLab, for instance, described a major infrastructure rebuild to support AI-driven workloads. Cisco framed its restructuring as a resource shift toward silicon, optics, security, and AI. Coinbase described AI as changing the speed of engineering work and pointed to experiments with smaller, more integrated teams.

Still, the AI layoff narrative carries risk. If companies invoke AI mainly to justify cost reductions without showing stronger products, clearer revenue growth, or real productivity gains, employees and investors may push back. The next phase of the AI economy will not be judged only by how many jobs companies cut, but by whether those cuts actually produce more capable organizations.

Source: TechCrunch AI