Five9 cuts workforce amid AI-driven contact center shakeup
CALIFORNIA, UNITED STATES — Five9 has laid off 120 employees or 4% of its workforce— marking its second round of job cuts since August 2024. The cloud contact center provider, facing activist investor pressure and artificial intelligence (AI) disruption, continues restructuring despite reporting 17% year-over-year revenue growth last quarter.
Cost-cutting measures follow investor pressure
The strategic workforce reductions at Five9 happened during an escalated period of monitoring from Anson Funds and Legion Partners as these groups pursued cost optimization and greater control over the board.
Strategic priorities serve as the stated reason for the cuts according to the company yet it is speculated that these decisions stem from “shareholder value” maximization given the stock price decline of 60% in 2022.
Despite double-digit revenue growth, Five9’s restructuring reflects broader financial pressures in the sector, where rivals like Cisco and Twilio have also slashed jobs.
The company’s decision to lay off staff demonstrates its attempt to boost operational efficiency because the market competition grows stronger while Amazon Web Services and Microsoft expand their AI contact center solutions.
AI disruption reshapes labor and pricing models
The contact center industry faces existential upheaval as AI automates roles traditionally filled by human agents. Companies like Zalando, and Sky have openly blamed AI for recent layoffs, raising concerns for vendors like Five9 that rely on per-seat pricing. Hyper scalers pose another threat, leveraging AI and cloud infrastructure to undercut traditional players.
Five9 and peers must now differentiate through specialization targeting niche markets or mid market clients to survive against tech giants. The company recently ranked #21 in the OA500 2025, an objective index of the world’s top 500 outsourcing companies.
