Nice CEO links 500 job cuts to AI productivity gains, including in R&D
Scott Russell says the Israeli-founded software company is targeting slower-growing businesses, using AI tools to increase productivity among developers and removing management layers.
Nice CEO Scott Russell has offered a more detailed explanation of the company's decision to cut approximately 500 jobs worldwide, saying the restructuring will reach beyond slower-growing business lines to include research and development, where employees are increasingly using artificial intelligence tools to boost productivity.
Speaking on the company's third-quarter earnings call on Wednesday, Russell said Nice had examined areas of the business with slower growth as part of its effort to improve operational efficiency. But he also pointed to changes in how the company develops products, explaining that AI is allowing its R&D teams to increase their output while management layers are being removed to make the organization more agile.
Asked by an analyst whether the planned workforce reduction was confined to non-core areas, Russell said the company had looked at slower-growing parts of the business to identify opportunities for greater efficiency.
“This also includes areas where, for example, in research and development, our teams are leveraging AI tools to increase productivity materially,” he said. He added that Nice was simplifying its organization by “removing layers of management and span of control” to improve its ability to operate across the business.
The comments provide a clearer picture of how Nice intends to reshape its workforce as it shifts toward AI-powered customer experience software. The company said it would reduce its global workforce by approximately 5%, or around 500 of its roughly 10,000 employees. CFO Beth Gaspich said the cuts would be concentrated primarily in product development, as well as go-to-market operations, customer support and services.
Nice is presenting the reductions as part of a broader effort to redirect resources toward its faster-growing businesses, particularly its CXAI platform, while relying more heavily on global systems integrators and other partners to help customers deploy its products. The company expects to record restructuring charges of $15 million to $20 million, primarily in the fourth quarter.
The decision is notable in light of Russell's comments to CTech in July, when he was asked directly whether Nice planned to reduce its workforce as AI adoption accelerated. “Our plan is to grow, not shrink. We have no plans to reduce headcount,” he said at the time, arguing that AI would take over repetitive tasks and allow employees to focus on higher-value work.
In the same interview, Russell was asked specifically about Nice's Israeli operations, which then employed approximately 1,000 people, or around 10% of its global workforce. He described the local center as one of the company's competitive advantages and said: “If anything, you'll see us continue expanding our R&D operations there.” He added: “We have no plans to reduce our workforce in Israel.”
The latest announcement does not establish how the 500 planned cuts will be distributed across countries. Nice has not disclosed how many employees in Israel, if any, will be affected. The company said the reductions would be global, with the main areas targeted including product development and customer-facing functions.
The role of AI in the restructuring is particularly significant. Nice develops software that helps large companies manage customer service operations, increasingly using AI agents to automate interactions that were previously handled by human representatives. The company has argued that its technology will allow customers to handle a growing volume of interactions without expanding their call-center workforces. It is now applying a similar productivity argument internally, saying AI tools can help its own development teams produce more with fewer resources.
The workforce reduction comes as Nice faces pressure to accelerate cloud growth while absorbing the costs of its transition toward AI. In the third quarter, revenue rose 8% to $791 million, while AI annual recurring revenue increased 46% to $392 million. But cloud revenue growth remained below the level management wants to achieve, and profitability weakened on a GAAP basis.
Russell acknowledged on the call that the company's cloud growth was “not where it needs to be,” even as he expressed confidence that investments in AI, sales capacity and partnerships would eventually translate into faster growth. He said the company was also adapting its go-to-market model to changing customer requirements and increasing its reliance on partners to support deployments.
