Monday.com is the latest tech company to blame AI for layoffs — here are 20 others

We have entered the era of the convenient excuse. For the last year, we watched as one tech giant after another trimmed the fat, usually blaming high interest rates or the post-pandemic hangover. But the narrative is shifting. Now, when a company like Monday.com or its peers let people go, they aren't just citing market conditions. They are pointing the finger directly at artificial intelligence.

The Great Efficiency Pivot

As a builder, you have to look past the headlines. When a CEO says they are restructuring because of AI, they are telling two different stories at once. The first story is for the shareholders: we found a way to do more with less, which means higher margins. The second story, the one meant for the rank-and-file, is more sobering: your role was a placeholder for a script that didn't exist two years ago.

Monday.com is just the latest in a long line of companies reaching for this justification. They joined a list of over twenty major firms this year alone that have explicitly linked headcount reduction to the implementation of automated systems. It’s a trend that started as a trickle with customer support and is now flooding into engineering, marketing, and mid-level management.

Why Founders Should Pay Attention

If you are building a startup right now, you are watching the legacy players do your homework for you. These layoffs represent a massive structural shift in how tech companies are valued. We used to measure a startup's success by its headcount—the 'more people equals more power' mindset. That’s dead. Today, the most impressive companies are the ones with the highest revenue-per-employee ratios.

When companies cite AI for layoffs, they are acknowledging that their old workflows were bloated. This isn't just about replacing a human with a chatbot; it's about realizing that many corporate functions were built on manual coordination that is no longer necessary. For the founder, this means you should be hiring for versatility, not for hyper-specific manual tasks that a fine-tuned model can handle by next quarter.

• Operational leaness: The goal is no longer to scale the team, but to scale the output.
• Skill shifts: The demand for 'doers' is dropping, while the demand for 'architects' who can manage AI workflows is skyrocketing.
• Investor expectations: VCs are no longer impressed by large offices; they want to see automated pipelines.

Reading Between the Lines

We need to be honest about what's actually happening here. In some cases, AI is a legitimate reason for a layoff. If you automate your Tier 1 support, you simply don't need fifty people answering the same ten questions. However, in many other cases, 'AI' is being used as a PR shield. It sounds better to say you are 'innovating through automation' than to admit you over-hired during a bubble and now need to cut costs to survive.

This is the skepticism we have to maintain. When you see twenty different companies citing the same technology as the reason for firing ten percent of their staff, you have to ask: is the tech really that ready, or is this just the easiest way to manage the stock price? For builders, the answer doesn't actually matter. Whether the AI is doing the work yet or not, the budget for those human roles is gone and it isn't coming back.

The shift toward AI-justified layoffs isn't a temporary trend; it's a fundamental re-rating of what a human employee is worth in a software-driven economy.

The Builder's Takeaway

If you're on the outside looking in, this might look like a disaster. But if you're building in the AI space, this is your market validation. The very thing these companies are using as an excuse to downsize is the product you are likely trying to sell or implement. The enterprise appetite for efficiency is at an all-time high because the pressure to perform is higher than it has been in a decade.

The takeaway for founders is clear: Stop building tools that require more humans to manage them. Start building tools that allow a single founder to do the work of a department. The companies on this layoff list are trying to move toward that reality by force. You have the advantage of starting there by design.

Don't get distracted by the corporate drama. Focus on the fact that the largest companies in the world are currently waving a white flag, admitting that their old way of working is too expensive to maintain. That is an opportunity for those of us building the new way.

Read the original at TechCrunch AI →