Monday.com Stock Climbs After Announcing 20% Workforce Cut, Raising Profit Outlook

Shares of Monday.com (NASDAQ: MNDY) gained 2.3% on Monday after the company announced a significant restructuring plan that includes reducing its workforce by approximately 20%. The move is intended to align the organization with its strategic focus on its AI Work Platform.

Restructuring Costs

Monday.com said it expects to incur total net restructuring charges between $45 million and $55 million. The majority of these costs are anticipated to be recognized in the second half of 2026.

The company provided a breakdown of the expected charges:

• Severance and benefits: $30 million to $35 million.
• Office space impairment: $30 million to $35 million.
• These costs will be partially offset by approximately $15 million in non-cash share-based compensation credits.

Updated Financial Outlook

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Alongside the workforce reduction, Monday.com raised its profitability forecast for the full year. The company now projects a non-GAAP operating margin of approximately 15%, an increase from its previous guidance of about 13%.

Crucially for investors, the company reaffirmed its other key financial targets. The full-year revenue growth outlook remains unchanged at 19% to 20%, and the adjusted free cash flow margin guidance is maintained at 19% to 20%. This signals that the efficiency measures are not expected to impact top-line growth.

Market Impact

The positive stock reaction indicates that investors are supportive of the cost-cutting measures, which are expected to directly improve the company's bottom line without sacrificing revenue. Such restructuring efforts, when framed as a strategic pivot toward high-growth areas like AI, are often viewed favorably by the market as a move toward more disciplined and profitable growth.