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

      TL;DR: Wix is laying off approximately 1,000 employees, about 20% of its total workforce, marking the largest layoffs in the company's history. CEO Avishai Abrahami pointed to the strengthening Israeli shekel and the necessity to realign the company towards AI-centric positions. The stock has dropped over 50% in 2026.

      Wix is cutting about 1,000 jobs, which represents around 20% of its workforce, in the most significant layoff in its history. CEO and co-founder Avishai Abrahami made the announcement on May 28 in a public message on X and sent it to all employees at the same time. He characterized the restructuring as a comprehensive company change, influenced by two main factors: a currency disparity that is increasing the cost of their Israeli workforce in dollar terms, and a fundamental transformation in the operations of software companies in the age of AI.

      As of the end of March 2026, Wix had 5,277 employees, with over 60% located in Israel. These reductions will lower the workforce to roughly 4,200 individuals. Those affected will receive what Abrahami described as personally curated separation packages and will be contacted individually.

      The shekel issue

      The Israeli shekel has significantly appreciated against the US dollar over the last two years, rising about 14% in 2025 and an additional 7% in the first five months of 2026. For a company that generates most of its revenue in dollars but pays most of its staff in shekels, this creates a structural cost increase that product improvements cannot mitigate.

      The currency shift has impacted the entire Israeli tech sector. A startup that raised one million dollars when the exchange rate was 3.7 shekels to the dollar now finds that million provides around 700,000 fewer shekels. Engineering salaries in Israel have surged by 15% to 20% in dollar terms in just a few months, positioning Israeli developers among the most expensive, at times even surpassing their counterparts in Silicon Valley.

      Wix is not the only company affected, but its exposure is notably significant. With over 3,000 employees in Israel and revenues almost entirely in dollars, Wix's cost structure is increasing faster than its revenue growth.

      AI as a key factor

      Abrahami described this moment as the most significant change in company structures since modern programming languages were introduced in the 1970s. He noted that Wix is transitioning to a flatter organizational model with fewer management levels to facilitate quicker decisions and clearer accountability. New roles have been introduced, such as the xEngineer, which focuses on design-first engineering aligned with AI-native workflows, and Creators, a broader category for staff primarily using AI tools.

      This restructuring is tangible. Other SaaS companies have undertaken similar changes recently, with ClickUp eliminating 22% of its workforce and GitLab restructuring for what it calls the agentic era. The common theme is that companies are removing positions that they believe AI can perform or enhance, then reorganizing around a smaller staff that directs AI systems instead of carrying out tasks manually.

      The stock downturn prior to the layoffs

      The layoffs follow a challenging period for Wix's stock. On May 13, shares plummeted 27% after the company released first-quarter earnings that fell short of Wall Street's forecasts. Revenue increased by 14% year-over-year to $541 million, but Wix reported a net loss of $57.5 million following several profitable quarters. Adjusted earnings were $0.68 per share, significantly below the $1.22 consensus estimate.

      Operating expenses as a percentage of revenue increased from 21% in Q1 2025 to 35% in Q1 2026, which alarmed investors. Since the start of the year, the stock has declined by more than 50%, reducing Wix's market capitalization to about $2 billion, down from nearly $20 billion in 2021.

      The company also recognized that its professional developer customers were using competing AI tools, and that its new Wix Harmony platform had deficiencies and missing features that delayed product updates. Earlier this year, Wix acquired Base44, a vibe-coding platform, for $80 million; however, the integration has not yet mitigated competitive pressures.

      The vibe-coding challenge

      Wix's primary business of assisting non-technical users in building websites is under threat from a new wave of AI-driven tools that enable users to describe their needs in straightforward language, with AI constructing the solution. Platforms like Lovable, valued at $1.8 billion, and Bolt.new have captured users who may have previously turned to Wix. The vibe-coding trend has also raised security concerns, with research uncovering thousands of vulnerabilities in publicly deployed applications built using these tools, yet the speed and ease of the approach continue to attract users.

      Wix has responded by incorporating AI into its existing platform through Wix Harmony, its core website builder