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

      **TL;DR** Wix is laying off around 1,000 employees, which is about 20% of its workforce, marking its largest layoffs to date. CEO Avishai Abrahami pointed to the strengthening Israeli shekel and the necessity to restructure the company for AI-focused roles. The company's stock has dropped over 50% in 2026.

      Wix plans to cut approximately 1,000 jobs, equating to about 20% of its workforce, in the most significant layoff in the company's history. On May 28, CEO and co-founder Avishai Abrahami announced this decision through a public message on X and directly to all employees. He explained that the restructuring was prompted by two main factors: a currency imbalance that has made the Israeli workforce more expensive in terms of dollars, and a critical shift in the operational model required for software companies in the AI era.

      As of the end of March 2026, Wix had 5,277 employees, with over 60% located in Israel. The layoffs will bring the total down to about 4,200. Those affected will receive what Abrahami referred to as carefully tailored separation packages and will be contacted individually.

      **The shekel issue**

      The Israeli shekel has risen sharply against the US dollar in the last two years, increasing by about 14% in 2025 and another 7% in the first five months of 2026. Since Wix generates most of its revenue in dollars but pays most of its employees in shekels, this currency shift leads to a structural rise in costs that product improvements cannot counteract.

      This currency fluctuation has impacted the entire Israeli tech industry. A startup that secured a million dollars when the exchange rate was 3.7 shekels to the dollar now finds that amount only buys around 700,000 fewer shekels. Salaries for Israeli engineers have surged 15% to 20% in dollar value within a few months, making them some of the priciest in the world, in some cases even more than Silicon Valley counterparts.

      Wix is certainly not the only Israeli firm facing these challenges; however, the company’s situation is particularly acute. With over 3,000 Israeli employees and virtually all revenue in dollars, Wix's cost structure is increasing more quickly than its revenue growth.

      **The AI factor**

      Abrahami characterized this moment as the most transformative shift in business structure since the advent of modern programming languages in the 1970s. He indicated that Wix is transitioning to a flatter organizational model with fewer management levels to facilitate quicker decision-making and clearer accountability. The company is introducing new positions, such as the xEngineer, which emphasizes design-centric engineering roles focusing on AI-driven workflows, and Creators, which encompass a broader range of employees utilizing AI tools.

      The restructuring is tangible. Other SaaS companies have made similar adjustments in recent months, with ClickUp reducing its staff by 22% and GitLab restructuring for what it terms the "agentic era." The common thread among these companies is the elimination of positions they believe AI can either handle or improve upon, followed by a reorganization around a smaller team that directs AI rather than performing manual tasks.

      **Stock decline preceding the layoffs**

      These layoffs come after a challenging period for Wix’s stock. On May 13, shares plummeted by 27% following the report of first-quarter earnings that fell short of Wall Street forecasts. Although revenue increased 14% year-over-year to $541 million, Wix reported a net loss of $57.5 million after a series of profitable quarters. Adjusted earnings were $0.68 per share, significantly lower than the consensus estimate of $1.22.

      Furthermore, operating expenses as a proportion of revenue escalated from 21% in Q1 2025 to 35% in Q1 2026, alarming investors. Since the beginning of the year, Wix’s stock has lost over 50% of its value, shrinking its market capitalization to around $2 billion from nearly $20 billion in 2021.

      The company also acknowledged that its professional developer clients were using competing AI tools and that the new Wix Harmony platform had notable gaps and delays in product updates. In an effort to compete, Wix purchased Base44, a vibe-coding platform, for $80 million earlier this year, but the integration hasn’t yet alleviated competitive pressures.

      **The vibe-coding challenge**

      Wix's core function, which is to assist non-technical individuals in creating websites, faces competition from new AI-driven tools that allow users to express their needs in simple language for AI to build their desired sites. Platforms like Lovable, valued at $1.8 billion, and Bolt.new, have captivated users who might have turned to Wix previously. The vibe-coding trend also raises security concerns, as studies have found thousands of vulnerabilities in applications created with these tools,