EL7.AI
StocksMedium•4 November 2026•
3 min read

NiCE to Cut Workforce by 5% as AI Revenue Rises 46% in Third Quarter

Key Facts

1NiCE expects to cut its global workforce by about 5%.
2Annual recurring revenue from AI rose 46% to $392 million, equivalent to 16% of cloud revenue.
3Total revenue was $790.7 million, up 8% year over year.
4The company expects pretax restructuring costs of between $15 and $20 million, most of them in the fourth quarter of 2026.

On November 4, 2026, NiCE said it expects to cut its global workforce by about 5% as part of a plan to streamline its operating structure, alongside its third-quarter results. The company did not specify how many jobs would be affected. The announcement came as annual recurring revenue from its AI business rose 46% year over year to $392 million. The company said that figure represents 16% of cloud revenue, putting the business's expansion at the center of the period's results and restructuring plan.

Total revenue was $790.7 million in the third quarter, up 8% from $732 million in the same period of 2025. NiCE said growth would have been 9.4% excluding an exceptional $10 million credit from one customer. That puts revenue performance in the context of accelerating AI activities, while the reported growth rate remained below the adjusted rate cited by the company. In the second quarter of 2026, revenue had risen 7.6% to $782.3 million, from $726.7 million a year earlier. Cloud revenue also rose 12.6% year over year in that quarter.

The comparison shows a decline in reported accounting profitability alongside growth in revenue and AI recurring revenue. In the second quarter, the company posted a GAAP gross margin of 64.0%, compared with 66.8% in the same quarter of 2025. These figures show the profitability trend in the reported periods, without by themselves determining the effect of the job cuts on future results.

Operating cash flow was $97.7 million in the third quarter, and the company used $72.2 million to repurchase its shares. The company did not provide a year-over-year comparison for operating cash flow in the figures cited. This use of cash comes alongside the restructuring plan, which NiCE expects to incur pretax costs of between $15 and $20 million. It said most of those costs will be recorded in the fourth quarter of 2026. The financial announcement therefore has implications for the coming period through the restructuring costs specified by the company.

NiCE said the plan includes reducing management layers and streamlining decision-making, alongside strengthening sales and delivery through partners. It said it will continue investing in growth priorities, including AI technology innovation for customer experience, service delivery, marketing and sales. In the second quarter, Chief Executive Scott Russell said enterprises were moving to consolidate their customer engagement needs on the AI-powered CXone platform. He added at the time that AI bookings hit a record in that quarter. Those comments provide context for the company's move to increase the role of partner channels and focus investment on growth priorities while streamlining management.

In August, the company maintained its 2026 non-GAAP revenue forecast at a range of $3,170 to $3,190 million and raised its non-GAAP diluted earnings-per-share forecast to $11.06–$11.26. NiCE scheduled a call to discuss its third-quarter results and outlook for November 4, 2026, at 8:30 a.m. Eastern time. It also expected most of the cited restructuring costs to be concentrated in the fourth quarter of 2026. The results announcement thus combines announced workforce cuts and strong growth in AI revenue with declines in net income and operating income under GAAP.