Investing.com -- Wix announced Thursday it will reduce its workforce by roughly 20%, according to a company-wide message from Co-Founder and CEO Avishai Abrahami shared on X.

The Israel-based web development company cited two primary factors driving the decision: the strengthening Israeli Shekel against the US Dollar and the rapid evolution of artificial intelligence capabilities.

"The first reason is the Shekel/Dollar rates. In the past few quarters the exchange rate between the Shekel and the US dollar has shifted significantly as the Israeli Shekel strengthens against the US Dollar almost every day," Abrahami wrote. The currency shift creates pressure on operations as most of the company’s teams are Israel-based with shekel-denominated costs, while revenue is largely dollar-denominated.

The company also pointed to AI-driven changes in how technology companies operate. Abrahami described the shift as "the most significant shift in how companies are built since the invention of modern programming languages in the 1970s."

Wix recently introduced new roles including Xengineer and Creators, designed around AI-native working methods. The restructuring will result in a flatter organizational structure with fewer management levels between leadership and junior team members.

Affected employees will be contacted directly and will receive separation packages, according to the announcement. The company stated the changes are necessary to maintain its service to millions of users who run their businesses on the Wix platform.