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Wix cuts 20% of its employees citing shekel-dollar exchange rate, AI implementation

From Jerusalem Post · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Wix will lay off 20% of its global workforce due to financial pressures from the strengthening Israeli shekel against the US dollar and the integration of artificial intelligence.
  • CEO Avishai Abrahami stated that the company's shekel-dominated costs and dollar-denominated revenue created unsustainable operational scale, while AI implementation made some roles redundant.
  • The layoffs signal a shift towards a leaner, faster organizational structure to compete in an AI-driven era, with affected employees receiving severance packages.

Israeli tech giant Wix is cutting 20% of its workforce, a move CEO Avishai Abrahami described as one of the hardest decisions but necessary for the company's sustainability. The layoffs stem from a "shekel-dollar crisis," where Wix's costs in shekels and revenue in dollars create significant financial pressure due to the shekel's recent strengthening.

We are reducing the Wix team size by roughly 20%. It is one of the hardest decisions I have had to make, but I am confident it is the right one, and I will explain why.

— Avishai AbrahamiWix CEO explaining the decision to lay off 20% of employees in a public X/Twitter thread.

Abrahami explained that this currency imbalance makes it impossible to maintain current operations at the existing scale. "It is a reality that directly shapes what is sustainable for our company," he wrote in a letter to employees. This situation highlights the vulnerability of Israeli tech firms with dollar revenues and shekel costs in the current economic climate.

This creates a structural pressure on our ability to operate at our current scale. It is a reality that directly shapes what is sustainable for our company.

— Avishai AbrahamiWix CEO explaining the financial impact of the shekel-dollar exchange rate on the company's operations.

Adding to the workforce reduction is the company's increased adoption of artificial intelligence. AI has automated tasks previously performed by humans, rendering some positions redundant. While Wix is creating new roles like "Xengineer and Creators" designed for AI-native workflows, these require a more agile structure, leading to a smaller overall team.

We are moving to a structure with fewer levels between any member of our leadership and the most junior person on the team. Fewer layers means faster decisions, clearer ownership, and less distance between the people setting direction and the people building the product - but it also means a smaller number of people.

— Avishai AbrahamiWix CEO detailing the organizational changes driven by AI adoption and the need for a leaner structure.

Abrahami emphasized the need to "compete" in an era where investing in AI is crucial to avoid falling behind. He assured departing employees that they would be contacted personally and offered "sensitivity, respect, and the care you deserve," along with curated separation packages. The "shekel-dollar crisis" is now impacting the high-tech sector, with Wix being the first prominent victim.

To those of you who are being let go, I want to once more say: Thank you.

— Avishai AbrahamiWix CEO addressing employees who are being laid off.
DistantNews Editorial

Originally published by Jerusalem Post. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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