Wix Cuts 1,000 Jobs as AI Changes Website Creation

Wix is facing one of the most difficult periods in its history as the company prepares to cut approximately 1,000 jobs, or around 20% of its workforce, following disappointing financial results and a dramatic decline in investor confidence. The layoffs, expected to be the largest in the company’s history, come as Wix struggles to adapt to a rapidly changing technology industry increasingly shaped by artificial intelligence. After years of growth as a website-building platform, the company is now confronting concerns that AI-powered coding tools could make some of its traditional services less relevant.

At the end of the first quarter of 2026, Wix employed 5,277 workers, with more than 60% based in Israel. The company had already dealt with workforce reductions after the COVID-19 pandemic, primarily affecting customer support and service positions as AI automation became more common. However, the upcoming layoffs are expected to impact nearly every department across the company, signaling a much broader restructuring effort.

The company’s financial troubles have intensified throughout 2026. Wix shares have fallen nearly 50% since the beginning of the year, and investor sentiment toward software companies has weakened significantly amid growing uncertainty about how AI will reshape the industry. Although Wix reported a 14% increase in first-quarter revenue, reaching $541 million, the company still posted a net loss of $57.5 million after several profitable quarters. Cash flow also dropped 21% to $112 million. Rising operating costs played a major role in the disappointing results, with expenses increasing by 50% year-over-year to $423 million, equal to 35% of total revenue.

Much of Wix’s recent strategy has centered on artificial intelligence, particularly after its acquisition of Base44, an AI startup founded by Maor Shlomo. Base44 specializes in “vibe coding,” a form of natural-language programming that allows users to create software using text prompts rather than traditional coding methods. The platform has become one of the fastest-growing parts of Wix’s business, reportedly reaching an annual recurring revenue of $150 million by May 2026, significantly ahead of company expectations.

Despite this rapid growth, Base44 has also become a major source of expenses. The technology requires heavy marketing investment and substantial computing power to support increasing user demand. Under the terms of the acquisition agreement, Wix has also been required to make additional payments to Shlomo as the platform hits performance milestones. In the most recent quarter alone, the company paid him another $38 million, with more payments expected later this year.

Wix has invested aggressively to position itself as an AI-focused company. During the Super Bowl, the company aired two advertisements: one promoting its traditional website-building products and another focused entirely on Base44. Wix is also developing its own AI model to improve Harmony, the company’s AI-powered website creation system. According to founder and CEO Avishai Abrahami, the long-term goal is to improve the accuracy of AI-generated websites while eventually lowering computing costs. For now, however, the investments are placing additional pressure on the company’s finances.

The company has also faced internal tensions during this transition. Earlier this year, Wix management ordered employees to return to full-time office work, a decision that sparked widespread criticism among workers and across Israel’s tech industry. At the same time, the company moved into a large new campus near Glilot Junction, though portions of the space were later subleased to other companies, including Fiverr.

Investors remain uncertain about Wix’s future. The company’s market value has fallen to roughly $2 billion despite a massive $1.6 billion share buyback program launched earlier this year to restore confidence. Financial analysis firm GuruFocus rated Wix’s financial strength at only 3 out of 10, while noting that the company still shows strong growth potential. The situation highlights the difficult balancing act many technology firms now face: investing heavily in AI innovation while simultaneously trying to maintain profitability and reassure investors in an increasingly competitive market.

Work Cited

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