Wix reduces its workforce by 20% due to AI and currency restructuring.

      TL;DRWix is reducing its workforce by around 1,000 jobs, making up approximately 20% of its total employees, marking the largest layoffs in its history. CEO Avishai Abrahami pointed to the appreciating Israeli shekel and the need to realign the company toward AI-focused roles. The stock has plummeted over 50% in 2026.

      Wix is set to lay off about 1,000 workers, which constitutes nearly 20% of its workforce, in the most extensive job cuts the company has ever experienced. Avishai Abrahami, CEO and co-founder, announced this decision on May 28 via a public message on X, which was also shared with all employees simultaneously. He explained that this restructuring is driven by two main factors: a currency discrepancy that has made the Israeli workforce more expensive when converted to dollars, and a significant transformation in the operational needs of software companies in the AI era.

      As of the end of March 2026, Wix had 5,277 employees, with over 60% based in Israel. The layoffs will bring the total headcount down to about 4,200. Those affected will receive tailored separation packages as noted by Abrahami, who plans to reach out to them individually.

      The shekel issue

      The Israeli shekel has appreciated significantly against the US dollar over the past two years, increasing by approximately 14% in 2025, along with another 7% in the first five months of 2026. Since Wix generates most of its revenue in dollars but pays most of its staff in shekels, this situation results in structural cost increases that cannot be mitigated by improved product offerings.

      The currency shift has impacted the entire Israeli tech landscape. A startup that raised a million dollars when the exchange rate was 3.7 shekels to the dollar now finds that amount converts to about 700,000 fewer shekels. As a result, Israeli engineering salaries have surged 15% to 20% in dollar terms in just a few months, making Israeli developers among the priciest in the global market, sometimes surpassing the costs of those in Silicon Valley.

      Wix is not alone in facing these challenges, but the concentration of its exposure is particularly high. With over 3,000 employees in Israel and revenue primarily in dollars, the company's cost base has been escalating more rapidly than its revenue growth.

      AI as a crucial factor

      Abrahami described the ongoing changes as the most significant transformation in company structuring since the advent of modern programming languages in the 1970s. He explained that Wix is transitioning to a flatter organizational design with fewer management layers to facilitate quicker decision-making and clearer accountability. New roles have been introduced, such as the "xEngineer," a design-centric engineering position that emphasizes AI-native workflows, and "Creators," a broader classification for employees primarily engaging with AI tools.

      This restructuring is not merely theoretical. Other SaaS companies have also undertaken similar initiatives recently, with ClickUp reducing its staff by 22% and GitLab reorganizing for the so-called agentic era. The commonality is that these companies are eliminating positions they believe AI can handle or enhance, and they are restructuring around a leaner workforce that directs AI systems instead of performing tasks manually.

      The drop in stock value preceding the layoffs

      These layoffs occur after a difficult period for Wix’s stock. Shares dropped 27% on May 13 following the company's disappointing first-quarter earnings report. While revenue increased by 14% year on year to $541 million, Wix experienced a net loss of $57.5 million after a series of profitable quarters. Adjusted earnings were reported at $0.68 per share, significantly lower than the $1.22 consensus estimate.

      Operating expenses relative to revenue surged from 21% in Q1 2025 to 35% in Q1 2026, causing alarm among investors. The stock has decreased by over 50% since the beginning of the year, resulting in Wix’s market capitalization plummeting to around $2 billion from a high of nearly $20 billion in 2021.

      The company has also recognized that its professional developer clientele is utilizing rival AI tools, and it has acknowledged shortcomings in its new Wix Harmony platform, which has led to delays in product updates. Earlier this year, Wix acquired Base44, a vibe-coding platform, for $80 million, yet this integration has not alleviated competitive pressures.

      The challenge from vibe-coding

      Wix’s primary business of assisting non-technical users in creating websites faces competition from an emerging wave of AI-driven tools that allow anyone to specify their needs in simple language and have AI do the work. Platforms such as Lovable, valued at $1.8 billion, and Bolt.new have garnered users who might have previously used Wix. The vibe-coding trend has also raised alarm over security, with research uncovering thousands