Wix cuts 20% of workforce in AI and currency restructuring

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TL;DR<br>Wix is cutting roughly 1,000 jobs, about 20% of its workforce, in the largest layoff in company history. CEO Avishai Abrahami cited the strengthening Israeli shekel and the need to rebuild the company around AI-native roles. The stock has fallen more than 50% in 2026.

Wix is laying off approximately 1,000 employees, roughly 20% of its workforce, in the largest round of cuts in the company’s history. CEO and co-founder Avishai Abrahami announced the decision on 28 May in a message posted publicly on X and sent simultaneously to all staff. He framed the restructuring as a company-wide change driven by two forces: a currency mismatch that is making the company’s Israeli workforce increasingly expensive in dollar terms, and a fundamental shift in how software companies need to operate in the age of AI.

Wix employed 5,277 people at the end of March 2026, with more than 60% based in Israel. The cuts will reduce headcount to roughly 4,200. Affected employees will receive what Abrahami described as personally curated separation packages and will be contacted individually.

The shekel problem

The Israeli shekel has strengthened sharply against the US dollar over the past two years, rising roughly 14% in 2025 and a further 7% in the first five months of 2026. For a company that earns the vast majority of its revenue in dollars but pays the majority of its workforce in shekels, the effect is a structural cost increase that no amount of product improvement can offset.

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The currency shift has hit the entire Israeli tech sector. A startup that raised a million dollars when the exchange rate was 3.7 shekels to the dollar now finds that same million buys roughly 700,000 fewer shekels. Israeli engineering salaries have risen 15% to 20% in dollar terms within a few months, making Israeli developers among the most expensive in the world, sometimes more costly than their counterparts in Silicon Valley.

Wix is not the only Israeli company affected, but its exposure is unusually concentrated. With more than 3,000 employees in Israel and revenue denominated almost entirely in dollars, the company’s cost base has been rising faster than its top line can grow.

AI is the other half of the equation

Abrahami described the current moment as the most significant shift in how companies are built since the invention of modern programming languages in the 1970s. He said Wix is moving to a flatter organisational structure with fewer management layers, designed to enable faster decisions and clearer ownership. The company has introduced new roles, including a position it calls xEngineer, a design-first engineering role built around AI-native workflows, and Creators, a broader category for employees working primarily with AI tools.

The restructuring is not abstract. Other SaaS companies have made similar moves in recent months, with ClickUp cutting 22% of its staff and GitLab restructuring for what it called the agentic era. The common thread is that companies are eliminating roles they believe AI can perform or augment, then reorganising around a smaller workforce that directs AI systems rather than doing the work manually.

The stock collapse that preceded the cuts

The layoffs follow a brutal period for Wix’s stock. Shares fell 27% on 13 May after the company reported first-quarter earnings that missed Wall Street expectations. Revenue rose 14% year on year to $541 million, but Wix posted a net loss of $57.5 million after several profitable quarters. Adjusted earnings came in at $0.68 per share, well below the $1.22 consensus estimate.

Operating expenses as a percentage of revenue surged from 21% in Q1 2025 to 35% in Q1 2026, a trajectory that alarmed investors. The stock has lost more than 50% of its value since the start of the year, reducing Wix’s market capitalisation to roughly $2 billion, down from a peak of nearly $20 billion in 2021.

The company also acknowledged that its professional developer customers were using competing AI tools, and that its new Wix Harmony platform had gaps and missing capabilities that delayed product updates. Wix acquired Base44, a vibe-coding platform, for $80 million earlier this year, but the integration has not yet reversed the competitive pressure.

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