- Wix has confirmed plans to lay off around one in five workers
- Despite job cuts, the company will continue to hire new positions for a future in which AI is a priority
- Stock prices down on news, also down after disappointing Q1 EPS result
Wix CEO Avishai Abrahami confirmed in an X post that the company will lay off around 20% of its workers as a result of an ongoing restructuring initiative that will affect all departments.
Among the reasons cited for the mass layoffs are currency and currency pressures, as many of the company’s workers and a large portion of its operating costs are located in Israel, under the Israeli shekel.
On the contrary, many companies’ revenues are dominated by the dollar, which has created a significant gap in the sustainability of the currency.
AI, rationalization and lost profits
“In recent quarters the exchange rate between the shekel and the US dollar has changed significantly,” he said. “This creates structural pressure on our ability to operate at our current scale.”
Furthermore, as expected, the CEO blamed artificial intelligence for the restructuring. “We have witnessed the most significant change in the way businesses are built since the invention of modern programming languages in the 1970s,” said the leader.
Abrahami explained that companies like Wix must “reconfigure” the way they operate, leading to significant job cuts. But the leader did not rule out future hires and pointed to the creation of new roles such as Xengineer and Creators.
He also became one of a growing number of business leaders who cite the need to flatten organizational hierarchy to optimize efficiency. He hopes that a more agile will will allow for faster decision-making to be more agile in the face of changes in technological capabilities and customer trends.
Although the finer details are under wraps, affected workers are promised “hand-selected separation packages.”
The company’s shares are down about 1.5% following the announcement and, worse still, about 47.9% year-to-date following a significant earnings miss in the first quarter, where adjusted EPS stood at $0.68 compared to Wall Street forecasts of $1.22.
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