monday.com Ltd. (NASDAQ:MNDY) said Wednesday it will reduce its workforce by about 20% as part of a restructuring plan aimed at aligning the company with its strategy to become an AI-focused work platform, while raising its full-year operating margin outlook.
Following the announcement, the stock rose nearly 2%.
monday.com To Cut 20% Of Workforce As It Restructures Around AI
The Israel-based software company said the restructuring reflects ongoing changes to its product, marketing and go-to-market strategy. The plan is intended to create a leaner operating model while allowing the company to continue investing in AI-driven growth.
Despite the workforce reduction, monday.com said it expects to keep hiring in key strategic areas through the remainder of 2026.
Restructuring Charges And Timeline
The company expects to incur net restructuring charges of approximately $45 million to $55 million. Those charges include $30 million to $35 million for severance, employee benefits and other related costs. They also include $30 million to $35 million for office space impairments.
The charges will be partially offset by about $15 million in non-cash share-based compensation credits. Most of the charges are expected to be recognized in the second half of 2026, when the restructuring is also expected to be substantially completed.
2026 Outlook And Margin Guidance
Alongside the restructuring announcement, monday.com reaffirmed its fiscal 2026 revenue growth forecast of 19% to 20%. The company also reaffirmed its adjusted free cash flow margin guidance of 19% to 20%.
However, it increased its non-GAAP operating margin outlook to about 15% from approximately 13%. The company said it still expects full-year 2026 financial results to be in line with or above the guidance provided during its first-quarter earnings call.
The updated non-GAAP operating margin and adjusted free cash flow margin guidance continue to reflect an estimated foreign exchange headwind of 100 to 200 basis points. The guidance also excludes any restructuring charges related to the plan.
monday.com Price Action
MNDY Price Action: monday.com shares were up 1.87% at $74.20 during premarket trading on Wednesday, according to Benzinga Pro data.
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