Monday.com laid off around 630 employees this week, roughly 20 percent of its workforce, and framed the cuts as part of pivoting the company toward AI agents rather than as cost-cutting. That makes Monday.com the twenty-first major tech company this year to publicly cite AI as a factor in layoffs, according to a running tally. The list is getting long enough that the more interesting question is no longer which company is next, it is whether the AI explanation is even true.
US tech companies have cut nearly 140,000 jobs so far in 2026, with Amazon, Oracle, Meta and Microsoft alone accounting for close to 50,000 of those, according to Financial Times analysis. Layoffs.fyi data shows a record 78 percent of companies conducting layoffs this year have cited AI-driven refocusing as a reason.
The skepticism is coming from inside the industry
The pushback on the AI-layoffs narrative is not coming from critics outside tech, it is coming from people inside it. OpenAI's own chief executive Sam Altman acknowledged in February that companies are frequently invoking AI as cover regardless of whether it is the actual cause, a pattern researchers have started calling AI washing. Wharton management professor Peter Cappelli has been blunter, arguing that companies are attributing job cuts to AI capabilities that are not yet actually doing the work being eliminated.
Monday.com's own numbers complicate its story. The company still projects up to 20 percent year-over-year revenue growth for 2026 even after the cuts, and expects to incur 45 to 55 million dollars in restructuring charges, hardly the profile of a company in financial distress that needs AI as an excuse to cut costs. Co-CEOs Roy Mann and Eran Zinman have said they are personally reaching out to other companies that are hiring to help place departing staff, and roughly 350 of the affected roles were based at the company's Tel Aviv headquarters.
What the pattern actually shows
Looking across this year's cuts, certain roles show up disproportionately: customer service teams facing AI chatbot automation, content operations including writers and moderators, and increasingly software engineering roles as AI coding assistants take on more of the work junior developers used to do. At the same time, nearly every company making these cuts is simultaneously hiring AI specialists and machine learning engineers, often at premium compensation, which undercuts the simplest version of the AI-replaces-humans story.
"Almost every company that does layoffs is blaming AI, whether or not it really is about AI," Altman said, describing the trend as AI washing.
What this means for India
India's technology and IT services sector has watched this US trend closely, because Indian outsourcing firms have historically been the ones absorbing exactly the kind of customer service, content operations and routine software work now being cited as most exposed to AI automation. If large US companies really are automating these functions internally rather than outsourcing them, that represents a structural threat to a business model India's IT industry has relied on for two decades. If instead this is mostly AI washing dressing up ordinary cost-cutting, the risk to India-based outsourcing is smaller than the headlines suggest, though the reputational and hiring caution it creates among global clients evaluating vendors is real either way.
Indian IT majors have already been managing slower hiring growth over the past two years, and how honestly Western clients report the real drivers behind their own layoffs will shape whether Indian firms see this as a genuine demand shift or a temporary narrative that settles once AI's actual productivity gains become clearer.
What to watch
The real test of whether AI is driving these cuts or merely getting blamed for them will show up in productivity data over the next several quarters, not in company statements. Watch whether companies citing AI for layoffs actually show measurable output gains per remaining employee, and whether hiring for AI-specialist roles at these same companies slows down once the current wave of infrastructure investment matures, which would suggest the current hiring pattern is temporary rather than a lasting structural shift.
Published July 26, 2026. Gadgets365 will update this article as more information becomes available.
