Wix, Rapyd and Amdocs became the latest Israeli tech firms to join a wave of layoffs to tighten operations, cut costs and reorganize their staff amid pressure to adapt to the new automation era.

Wix, a maker of do-it-yourself website building software, on Thursday confirmed reports that it is cutting as many as 1,000 employees — or about 20 percent of its workforce in Israel and abroad — as the continued strength of the shekel has been driving up costs. The job cuts were announced after the eCommerce platform provider posted a loss in the first quarter of this year and made investments in AI-related tools.

“It is clear to us that in this new era, companies need to make this change in order to lead and compete or risk falling behind,” Wix co-founder and CEO Avishai Abrahami said in a message to employees. “We need to become a faster, leaner, and flatter organization.”

“We are doing this as a company-wide change, a decision that will impact the entire organization, driven by how we need to operate going forward,” Abrahami said.

As the first reason for the round of layoffs, Abrahami cited the shekel’s fast appreciation over the past few quarters, which was driving up costs. The local currency, which has gained more than 20% over the past 12 months and reached a 33-year-high against the dollar, has been hurting many Israeli firms’ profits as they mainly sell globally and earn mostly in dollars. However, they pay workers’ salaries, overhead costs, taxes and other expenses in shekels, which have become more expensive due to the strength of the local currency.

This is forcing businesses to make tough decisions, with painful domestic consequences for employees and the economy.

“As the majority of our teams are Israel-based, a very meaningful portion of our costs is shekel-denominated, while our revenue is largely dollar-denominated,” said Abrahami. “This creates a structural pressure on our ability to operate at our current scale.”

“It is a reality that directly shapes what is sustainable for our company,” he cautioned.

Founded in 2006, Wix is listed on the Nasdaq with a market cap of about $2.2 billion. At the end of March, the tech firm employed........

© The Times of Israel