NICE, the Israeli software company for customer service and contact centers, is laying off about 500 employees, about 5% of its roughly 10,000 workers worldwide. According to reports, the layoffs are part of an AI-related restructuring, and the company has not detailed how they will be split between countries.
What is known about the layoffs?
According to reports, the cuts will reach not only slower-growing business lines but also research and development, where employees increasingly use AI tools to work faster. The Israeli operation is expected to be relatively spared: according to Calcalist, CEO Scott Russell pledged in July that the company would not reduce its Israeli workforce.
Why now?
NICE is reshaping itself around AI. A little over a year ago it acquired Germany's Cognigy, which builds AI agents for customer service, in a deal reported at about $1 billion. The logic is that AI agents will replace much of the work of service representatives, and whoever sells software to contact centers must also sell the agents that will replace them.
The cost of the shift
The problem is that the shift undermines NICE's old business model, built on selling licenses by the number of agents in a contact center. Fewer agents means fewer licenses. According to reports, NICE is worth about $6.5 billion today, far from its peak of about $20 billion during the Covid period.
What does it mean for Israel?
NICE is one of the oldest and largest software companies that grew up in Israel. Even if the operation here is spared this time, it joins a long list of companies, including Axonius, ServiceNow and Tastewise, explaining cuts with AI. Russell's pledge about Israel will be tested the next time the company needs to cut.
