On paper, Redis is having a very good year. This spring, the database company surpassed $300 million in yearly recurring revenue, capitalizing on a surge in demand for the infrastructure necessary to support AI systems. Twelve thousand clients have made payments. The client list includes one-third of the Fortune 100. However, about 75 employees at its Tel Aviv development center are finding out they are unemployed this week.
About 25% of the company’s 300 Israeli employees have been laid off, which is a startling figure for a business that was just a few weeks ago celebrating a revenue milestone. Ofer Bengal and Yiftach Shoolman founded Redis in Tel Aviv in 2011, and since then, it has developed into one of the most popular database technologies worldwide. Its open-source origins have given way to a commercial platform that powers applications at eight of the ten biggest companies in the world. When reporters questioned the company, it refused to comment, calling the reports rumors and conjecture. According to most accounts, the dismissal notices were sent out nonetheless.
The way this developed had an odd choreography. Redis recently committed to a long-term relationship by signing a ten-year lease on new offices in Israel. The layoffs followed. Of course, both can be true simultaneously. A business can reduce the size of its workforce while maintaining faith in the site. It’s difficult to ignore the dissonance between the two announcements, though, and it’s even more difficult for the engineers packing up their desks to feel reassured by a real estate contract.
Redis is positioned within rather than outside of a larger pattern due to the timing. In recent weeks, Wix, Rapyd, and Amdocs have all announced layoffs. This is part of a trend in Israeli technology as businesses tighten operations and restructure around automation. Not helping either is the strong shekel, which subtly raises the cost of every Israeli salary on a balance sheet denominated in dollars. The math is being done by foreign companies with Tel Aviv R&D facilities, and it has become less amicable.
The profitability issue that the Redis case raises regarding the entire AI moment is what makes it worth considering. This is a company positioned almost perfectly for the current cycle. Earlier this year, it introduced a context and memory platform for AI agents—exactly the kind of plumbing that agentic systems require. Income is increasing.
There is actual demand. And still, the cuts came. The business may be just reorganizing its teams to focus on new objectives and replacing outdated skill sets with AI-related ones, a trend evident throughout the sector. It’s also possible that investors, who placed Redis’s 2021 valuation at $2 billion, are demanding margins that growth by itself hasn’t produced. According to reports, Tiger Global and Viola recently sold hundreds of millions of shares, indicating that some early backers are already leaving.
The American executive Rowan Trollope, who succeeded the founders in 2023, is currently in charge of a business whose focus has gradually shifted toward Mountain View. The founders are gone from management. The largest R&D center remains in Israel, for now, alongside hubs in the US and Bulgaria. It’s unclear if Tel Aviv will maintain that position for the duration of the ten-year lease.
The industry-wide context offers little solace to the 75 individuals affected. They were employed by a company that was expanding, well-funded, and truly successful, but it still fired them. That may be the most unsettling lesson of this layoff cycle: in 2026, doing well is no longer a guarantee of anything.
