Monday.com Says Its 20% Layoff Lifted Margins but Slowed Sales

Layoffs are usually announced with a number: how many jobs, how much money saved. Rarely do executives come back a few months later and say, on the record, what the cuts cost them. Monday.com did exactly that on Monday, November 9, when it reported third quarter results.

According to Ctech by Calcalist, the work management software company's executives said its 20% workforce reduction drove record profit margins, but also hurt sales and will weigh on growth into 2027. For anyone who manages people, it is a rare and useful case study.

The Savings

Monday.com announced the plan on July 22, saying about 630 people, or 20% of the workforce, would be cut. By the end of September, total headcount had fallen to 2,479, down 690 from the second quarter, according to the company's CFO, Eliran Glazer, as reported by Ctech.

Glazer said the layoffs saved about $100 million and that strong third quarter profitability "was basically the result of the RIF," the company's term for reduction in force. The non GAAP operating margin reached a record 24%, up from 15% a year earlier. The company plans to reinvest most of the savings in AI and in employee retention, he said.

The Cost

The other side of the ledger showed up in sales. Chief Revenue Officer Casey George said the layoffs caused "disruption and some distraction" that "lingered, candidly, a little longer than we thought," Ctech reported, adding that there is still "a little bit of a hangover."

Revenue rose 19% to $377.5 million, ahead of guidance. But fourth quarter guidance of $380 million to $382 million implies growth of about 14%. Glazer said part of the slowdown is "obviously" due to the layoffs but declined to put a figure on it.

The cuts were also expensive to carry out. Ctech reported that the company paid $47.2 million in cash on restructuring in the quarter, $32.0 million to employees and $15.2 million to exit leased offices.

Not Only the Layoffs

Co Chief Executive Eran Zinman listed three headwinds: the restructuring, pressure in the small business market, and "more deliberate buying behavior and longer sales cycles" as customers weigh how AI fits their business. He also said an experiment that put about 25% of the marketing budget toward "agentic" customer acquisition "didn't convert as much as we wished," and money is shifting back to events, field marketing and sales.

What Leaders Can Take From This

Every organization is different, and Monday.com's numbers are its own. Still, its candor offers a few lessons that apply well beyond software.

Disruption has a tail. Cutting a fifth of a company does not end on the day of the announcement. Teams lose relationships, knowledge and focus, and customers notice. Plan for the recovery period, not only the cut.

Count the full cost. Severance, office exits and lost momentum all belong in the calculation. Margin gains in one quarter can hide slower revenue in the next.

Protect revenue teams during change. When sellers are distracted by uncertainty about their own jobs, pipeline suffers. Clear communication and quick decisions on who stays and why can shorten the hangover.

Retention is part of the plan. Monday.com says it will reinvest savings in employee retention. The people who remain after a layoff are the ones who rebuild the business, and they are often the ones most likely to leave.

The Takeaway

Monday.com still grew revenue 19% and ended the quarter with $1.1 billion in cash and marketable securities, according to Ctech. This is not a story of collapse. It is a story of tradeoffs, told openly. Leaders weighing their own restructuring would do well to read it as a reminder that every saving comes with a price, and that the price is often paid by the people and customers who stay.