Monday.com cuts 620 jobs and raises its margin outlook in the same breath

Monday.com is cutting about 620 jobs, roughly 20% of its workforce, while raising its full-year non-GAAP operating margin outlook to about 15% from 13%, as the company restructures around its AI Work Platform. The company expects $45 million to $55 million in restructuring charges and keeps its 2026 revenue growth outlook at 19% to 20%. Co-founders Roy Mann and Eran Zinman said in a letter that "the organization we built for our previous chapter is not the organization that fits the new AI era.

Monday.com is cutting about a fifth of its workforce while lifting its margin target, and that tells you exactly how AI is being priced inside software companies now. About 620 people are leaving Monday.com after the company told investors on July 22, 2026, that it would reshape the business around its AI Work Platform. The Times of Israel reported that about 350 of the affected roles are in Tel Aviv, where the company has a large share of its staff. Monday.com also said it expects $45 million to $55 million in restructuring charges. Then came the sharper line. The company raised its full-year non-GAAP operating margin outlook to about 15%, up from about 13% previously, while keeping its 2026 revenue growth outlook at 19% to 20%, according to Investing.com and the company's filing. That's the story. Monday.com isn't presenting this as retreat. It says the restructuring is meant to support a leaner operating model and keep investment moving toward AI-driven growth. The company had already announced in May that it was rebuilding its platform around people and agents working together, with AI agents that can qualify leads, close support tickets, process purchase requests and draft campaigns inside Monday.com's workflows. You can read the layoff as a sad human event, because it is one. You can also read it as a financial statement in plain sight. A software company cuts roughly 20% of staff, keeps hiring in selected AI roles, absorbs a one-time charge, and shows investors a higher margin target on the same day. That is not a side effect. It's the model. The margin is the message The company's founders, Roy Mann and Eran Zinman, were blunt in a letter quoted by The Times of Israel: "The organization we built for our previous chapter is not the organization that fits the new AI era." That line matters because it doesn't hide behind softer language about efficiency. It says the old org chart no longer matches the product Monday.com wants to sell. Frankly, every SaaS founder should sit with that for a minute. For years, headcount growth was treated as proof that a company was scaling. Bigger sales teams, bigger support teams, bigger product teams. Now investors are asking a colder question: how much of that work should still be done by people? Monday.com has already been testing the answer internally. A widely circulated 20VC interview with co-CEO Eran Zinman described Monday.com moving roughly 100 inbound sales development representatives away from lead qualification after AI agents took over that function, cutting response time from about 24 hours to about three minutes. The workers were described as being moved to outbound prospecting, not fired, which is an important distinction. But the operating lesson is still clear. Once a function can be run by agents, the human team around it changes. Other companies are doing versions of the same thing. TechCrunch reported in June that GitLab cut about 14% of its workforce, roughly 350 jobs, while investing in infrastructure for AI workflows. Workday said in a February 2025 filing that it would eliminate about 1,750 positions, or 8.5% of its workforce, while prioritizing AI and platform development. Cloudflare said this May it would cut about 20% of staff after AI made some roles obsolete, according to TechCrunch. This is now a pattern. The seat model is under pressure Monday.com's problem isn't only how many people it employs. It's also how software gets bought when agents do more of the work. The classic SaaS model charged by human seat. That made sense when a product was mainly a place where people logged in, updated records, managed tasks and pushed work along manually. Agents weaken that logic. If one agent can handle work that used to require several human users, the vendor can't keep pretending headcount is the cleanest measure of value. Monday.com has already moved in that direction. Its own support documentation says customers joining the Monday AI Work Platform from May 6, 2026, buy both seats for people and AI credits for supported AI usage. Basic starts at 1,000 AI credits a month, Standard at 2,000, and Pro at 3,000. That is a real pricing shift, not a slogan. Seats still exist, but they are no longer the whole bill. CIO recently cited Gartner's prediction that at least 40% of enterprise SaaS spending will move toward usage-, agent-, or outcome-based pricing by 2030, with seat-based vendor revenue share falling from 21% to 15%. You don't have to treat that forecast as destiny. Forecasts miss. But it gives you a useful frame for Monday.com's move: the company is trying to rebuild its cost base and its product before buyers force the issue from the other side of the table. The risk is execution. Large platform rebuilds sound cleaner in investor language than they feel inside product teams. Monday.com says this is the largest product change in its history, and the people leaving include knowledge about customers, internal systems and old decisions that never made it into a dashboard. Losing that memory has a cost, even when the spreadsheet says margins improve. Investors know that too. Globes reported that Monday.com's share price had fallen about 50% since the start of 2026 and more than 80% from its peak before the latest announcement. A higher margin target helps. It doesn't prove the AI Work Platform will replace the growth investors are worried about. Still, the signal is hard to miss. Monday.com is telling the market that the AI version of the company should need fewer people in some places, different people in others, and a pricing model that charges for machine work as well as human access. If you're building or buying enterprise software, that's the calculation now sitting underneath the pitch deck. 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