Wix lays off 20% of staff in AI and currency restructuring

Wix is cutting approximately 1,000 jobs, representing about 20% of its total workforce, in what stands as the largest layoff in the company’s history. CEO and co-founder Avishai Abrahami announced the decision on 28 May through a public post on X and an internal company-wide message. He described the restructuring as a company-wide transformation driven by two main factors: a currency mismatch that is making Wix’s Israeli workforce significantly more expensive in dollar terms, and a fundamental shift in how software companies must operate in the age of AI.

At the end of March 2026, Wix employed 5,277 people, with over 60% based in Israel. After the cuts, headcount will drop to roughly 4,200. Abrahami stated that affected employees will receive personally curated separation packages and will be contacted individually.

The strengthening Israeli shekel is a major driver of the layoffs. Over the past two years, the shekel has appreciated sharply against the US dollar, rising about 14% in 2025 and another 7% in the first five months of 2026. Since Wix earns the vast majority of its revenue in dollars but pays most of its workforce in shekels, this creates a structural cost increase that product improvements alone cannot fix.

This currency shift has impacted 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 amount buys roughly 700,000 fewer shekels. Israeli engineering salaries have jumped 15% to 20% in dollar terms within just a few months, making Israeli developers among the most expensive globally, sometimes surpassing their counterparts in Silicon Valley.

While Wix is not alone in facing this challenge, 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 transformation 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. Wix is moving to a flatter organizational structure with fewer management layers, designed to enable faster decisions and clearer ownership. The company has introduced new roles, including xEngineer, a design-first engineering role built around AI-native workflows, and Creators, a broader category for employees working primarily with AI tools.

This restructuring is part of a broader industry trend. Other SaaS companies have made similar moves recently, 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 reorganizing around a smaller workforce that directs AI systems rather than doing the work manually.

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 capitalization 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.

Wix’s core business, helping non-technical users build websites, is being challenged by a new generation of AI-powered tools that let anyone describe what they want in plain language and have an AI build it. Platforms like Lovable, valued at $1.8 billion, and Bolt.new have attracted users who might previously have turned to Wix. The vibe-coding movement has also raised security concerns, with research finding thousands of vulnerabilities in publicly deployed applications built with these tools, but the speed and simplicity of the approach is drawing users regardless.

Wix’s response has been to layer AI into its existing platform through Wix Harmony, its core website builder, Wix Vibe, a headless AI site creation tool, and Base44 for AI application building. Base44 reportedly reached $100 million in annual recurring revenue within roughly a year of its founding. But the broader market narrative, sometimes called the SaaSpocalypse, has punished conventional software companies whose products investors believe AI agents could make obsolete.

Wix is part of a wave of AI-driven layoffs that has swept the tech industry in 2026. More than 95,000 jobs have been cut across roughly 250 events so far this year, according to industry trackers. Meta cut 8,000 jobs and Microsoft offered its first-ever voluntary retirement program. Oracle eliminated up to 30,000 positions. GitLab restructured around AI agents. The pattern is consistent: record or near-record revenues, significant headcount reductions, and the savings redirected into AI infrastructure.

Abrahami’s letter was notable for its directness. He told remaining staff to treat departing colleagues with respect and acknowledged that the people being let go had built things the company is proud of. He framed the decision as necessary to protect Wix’s users, shareholders, and long-term viability. Whether the restructuring succeeds will depend on whether a leaner, AI-augmented Wix can grow its way out of a currency squeeze and a competitive landscape that is being redrawn by the same technology it is betting on.