Nice to lay off 500 employees as it struggles to navigate the AI transition
The Israeli-founded software company is seeking to reshape its business through acquisitions and asset sales as customers delay major spending decisions and new AI tools challenge its traditional offerings.
Despite a promise made by Nice CEO Scott Russell in July that the company would not reduce its workforce in Israel, the company is now initiating layoffs affecting approximately 500 employees worldwide. The cuts represent 5% of Nice’s global workforce of 10,000, including around 1,000 employees in Israel. According to estimates, the layoffs will have little impact on the company’s operations in Israel.
Nice has reached a crossroads over the past two years, a period that has coincided with Russell’s appointment as CEO and the upheaval brought about by artificial intelligence. The company’s stock has fallen 17% over the past year, although it has remained relatively stable since the beginning of 2026. Nice is currently valued at approximately $6.5 billion, well below the roughly $20 billion peak it reached during the Covid-19 pandemic.
As AI reshapes the customer service industry, Nice is pursuing a broad strategic shift. It is seeking to sell its Actimize division while also expanding its AI capabilities through the $1 billion acquisition of a German AI-agent startup. The technology is intended to help customers automate service operations and reduce their reliance on human call-center staff.
Nice is on track to surpass $3 billion in annual revenue for the first time, assuming it meets its forecast for 10% growth. However, earnings per share are expected to decline by nearly a dollar, to approximately $11, despite an aggressive share buyback program.
The company sells customer relationship management (CRM) and customer service software to approximately 25,000 clients worldwide, including 85% of the Fortune 500. Its customer base spans a wide range of industries and markets, with major customers including Marriott, Lidl, Lufthansa and Disney.
Nice is scheduled to publish its third-quarter results on Wednesday, against a challenging backdrop in which new AI solutions are reshaping the market for customer service software. The company has issued a relatively conservative forecast, projecting quarterly revenue of $780 million to $790 million and earnings of $2.73 to $2.83 per share.
Following its previous quarterly results, Nice management said that customers had delayed signing contracts during the first two quarters of 2026. Even some of its largest clients, including major financial institutions, had opted to wait and assess how the AI market develops before making significant commitments. The company expects contract signings to accelerate in the second half of the year, supporting a faster pace of revenue growth.
Nice said in response: “Nice is making changes to its organizational structure and resource allocation to better serve customers implementing AI-driven customer experience solutions at an enterprise scale. As part of this plan, we anticipate reducing our global workforce by approximately 5%. This is a necessary step to position Nice for the future and ensure that we achieve our strategic goals. These are difficult decisions involving valued colleagues, and our immediate priority is to speak directly with affected employees and provide them with full support throughout the transition.”
