AI layoffs mount amid software sector bloodbath

AI-driven layoffs are sweeping the software sector, with companies like monday.com cutting 20% of staff and Wix reducing its workforce by 1,000. The trend, dubbed 'SaaSpocalypse,' reflects fears that AI will disrupt the SaaS business model. However, some firms are beginning to rehire, questioning the long-term viability of replacing humans with AI.

AI-driven layoffs are mounting across the software sector, with companies citing AI development as the primary reason for workforce reductions. The phenomenon, sometimes called 'SaaSpocalypse,' reflects fears that AI will disrupt the SaaS business model. Israeli companies are notably affected: monday.com announced layoffs of 620 employees (20% of its workforce) on Wednesday, July 22, 2026, as it shifts from a work management platform to one integrating AI agents. Wix cut 1,000 employees (20%) this year, citing AI and shekel strength. Fiverr laid off 250 employees (a third) in September 2025 to become leaner and AI-focused. Globally, 165,000 layoffs occurred in the first half of 2026, including Oracle (21,000), Microsoft (4,800), Salesforce (4,000), and Intuit (3,000). However, some companies are beginning to rehire, with executives at Ford and IBM questioning the long-term wisdom of replacing humans with AI. The article notes skepticism remains, as investors have not been convinced by the AI pivot, with stocks of affected companies falling significantly.