ServiceNow, the Santa Clara enterprise software giant, confirmed a new round of layoffs in early November, its third in 2026. The company did not disclose how many employees are affected, but according to reports the cuts hit workers in the US, UK and India. Searches for 'ServiceNow layoffs' jumped more than 1,800% in the US this week, according to Google Trends.
What is known about the layoffs?
The first reports appeared on November 4, and the company confirmed them the next day. ServiceNow said it is making 'necessary changes' to its structure and aims to end 2026 with headcount similar to where it started the year. In its third-quarter results, the company reported employee severance costs of $87 million in the quarter and $167 million in the first nine months of the year.
Why now? The results and the stock
The layoffs follow results that disappointed Wall Street. Subscription revenue rose 21% to nearly $4 billion, but guidance for contracted revenue growth (cRPO) came in below expectations. The stock plunged about 25% the day after the results, the steepest drop in its history according to reports, and according to Calcalist lost about 35% in under two weeks.
The big question: AI
ServiceNow raised its AI sales target to $1.7 billion, but the market was not convinced. Investors fear a scenario dubbed the 'SaaSpocalypse': AI agents replacing part of the work done today by employees using enterprise software, so companies need fewer licenses. According to some analyses, ServiceNow's gross margin has also eroded, possibly because of the cost of running AI products.
And the Israel connection
According to Calcalist, hundreds of employees were hit in the summer round of layoffs, including in Israel. ServiceNow is also one of the biggest buyers of Israeli technology: it acquired cyber company Armis for $7.75 billion, one of the largest deals in Israeli cyber history. That means the pressure on ServiceNow, as on monday.com, Wix and other software companies, is felt in Israel's job market too.
What does it say about the software industry?
ServiceNow is one of the strongest and most profitable enterprise software companies, and if even it is cutting jobs and being punished on the market, it is a sign the market is changing how it values the whole sector. The per-seat licensing model on which dozens of companies were built is in question. Companies that convince investors AI grows their revenue, not just their costs, will win. The rest will keep cutting.
