**The big picture:** Companies are increasingly attributing layoffs to AI investments, but a disconnect exists between the stated reasons and actual impact, often leading to critical skill loss. **Why it matters:** Excluding IT leaders from layoff decisions risks misjudging AI capabilities, leading to unnecessary job cuts and undermining the very productivity gains companies seek. **Between the lines:** - 99% of C-suite leaders anticipate headcount reductions in the next two years. - Nearly a third of HR professionals report critical skill loss due to AI-blamed layoffs. - Only 35% of IT and HR leaders collaborate on AI-related workforce decisions, despite 94% seeing it as a priority. **Staffing & HR impact:** Staffing firms and HR departments face challenges in backfilling lost expertise and ensuring compliance if AI-driven layoffs are based on flawed assessments, potentially impacting gross margins and recruiter mobility. **The bottom line:** Involving IT leaders in layoff decisions is essential to ensure accurate AI assessments and prevent

**The big picture:** Israeli workplace software maker Monday.com is laying off 20% of its workforce, approximately 630 employees, as it restructures to prioritize its AI Work Platform. This move is part of a broader strategy to refocus investments around AI projects. **Why it matters:** This action underscores a significant trend where tech companies are shedding traditional roles to invest heavily in AI, signaling a fundamental shift in talent demand and workforce composition across the industry. **Between the lines:** - Monday.com is reducing its headcount by 630 staff to support a "leaner, more focused operating model." - The company expects to incur $45 million to $55 million in restructuring charges. - A record 78% of companies have cited AI refocus as a reason for layoffs in 2026, according to Layoffs.fyi. **Staffing & HR impact:** Recruiters in the tech sector will face increased demand for specialized AI talent while navigating a surplus of displaced general tech workers. Staffing firms must rapidly adapt to these evolving skill requirements to maintain relevance and gross margins. **The bottom line:** AI is not merely augmenting work; it is actively reshaping entire workforce structures, demanding strategic talent recalibration from employers.