According to Monday.com, the reorganization reflects a broader shift in how the company views its business. In a message to employees published on LinkedIn, cofounder and co-CEO Eran Zinman said the company has spent the past several months evolving from software that helps customers manage work to a platform where people and AI agents complete work together.
"We entered a new era where AI is transforming the role of software, creating the greatest opportunity our industry has ever seen," Zinman wrote. "We have a new market to capture. Without a fundamental change in how we operate, we will not be able to compete and win that market."
The company said the restructuring will flatten its organizational structure by reducing management layers, creating smaller teams with broader ownership, and giving employees more authority to make decisions. Monday.com is also introducing a new go-to-market approach centered on supporting customers as they adopt AI, including expanded implementation support and new customer-facing roles.
Management emphasized that the layoffs were not intended as a cost-cutting measure or an effort to replace employees with artificial intelligence. The company said most of the savings from the restructuring will be reinvested into its workforce, products, AI initiatives, and future growth.
"Improving margins was not the purpose of this decision," the company said in its employee memo.
Monday.com also addressed concerns that internal AI adoption had directly caused the layoffs. "While we are seeing significant value from AI internally, this decision was not made to reduce costs or replace people with AI. We see internal AI adoption as an accelerator of our growth. This change was made to adapt the company to our new vision."
The company's AI Work Platform is designed around four core capabilities: a no-code application builder, customizable AI agents, workflow automation, and an AI chatbot that can generate reports and update dashboards. Monday.com has positioned the platform as the next stage of enterprise work, where AI agents collaborate alongside employees rather than serving as standalone features.
The company expects to record restructuring charges of between $45 million and $55 million related to the workforce reduction. Monday.com previously reported having 3,155 employees in its annual report, and the company said the cuts will affect approximately 620 employees.
Executives said they do not currently plan additional workforce reductions and described the restructuring as the organizational model they believe is needed for the company's next phase.
"Our path is very clear to us. This is a change we have chosen to make, and we are taking full responsibility for it," Zinman wrote. "We have never seen such a significant opportunity in software, driven by such exciting technology."
Monday.com's restructuring comes as software companies increasingly reorganize around AI-driven products and services, with the company betting that its AI Work Platform will become the foundation for future enterprise customer adoption while supporting AI agents that can work alongside human teams.
This analysis is based on reporting from Business Insider.
Image courtesy of Monday.com.
This article was generated with AI assistance and reviewed for accuracy and quality.
