Wix is preparing for its largest round of layoffs ever as it faces financial challenges, rising AI costs, and investor concerns about future profits. Reports say Wix will cut about 1,000 jobs over the next few months, nearly 20% of its global staff.
This decision follows a tough stretch for Wix, whose stock price has dropped nearly 50% since the start of the year. At the end of the first quarter, Wix had over 5,200 employees, most of them in Israel.
Wix has made smaller layoffs before, especially after the pandemic, but this round is expected to be much larger. Earlier cuts mostly affected customer support and service roles as Wix started using more AI automation. Now, almost every department is likely to be affected.
These layoffs come as Wix undergoes major changes and expands its AI operations. Lately, Wix has focused on buying Base44, an AI coding platform started by Maor Shlomo. Base44 lets users build websites and apps using natural language prompts, putting Wix in a stronger position in the fast-growing AI market.
Base44 has reportedly seen rapid revenue growth, but it also entails high computing and operating costs. Wix has spent heavily on marketing, building AI infrastructure, and developing its own AI systems, resulting in significantly higher expenses.
The financial strain is now clear. Wix recently reported a net loss of $57.5 million in the first quarter, even as revenue rose 14% to $541 million. Operating costs jumped, and cash flow dropped compared to earlier quarters.
The company has also spent heavily on initiatives to build shareholder confidence, including a $1.6 billion share buyback program launched earlier this year. However, the strategy has so far failed to stabilize investor sentiment as concerns continue growing around the future relevance of traditional website-building platforms in an AI-driven market.
Investors are increasingly concerned that AI coding tools could threaten Wix’s core business by enabling users to build websites more easily without traditional platforms. In response, Wix has sped up its AI plans with Base44 and its own AI model, Harmony, which aims to make website creation easier through advanced automation.
Founder and CEO Avishai Abrahami has defended Wix’s spending on AI, saying that while it costs a lot now, it could lower long-term costs and make the company more competitive in the future.
Even so, the quick move to AI is changing what kinds of workers Wix needs. Earlier this year, Wix was also criticized for making employees return to the office full-time, which caused backlash in Israel’s tech industry.
The upcoming layoffs reflect a broader shift happening across the global technology sector, where companies are increasingly restructuring operations around artificial intelligence while simultaneously attempting to control rising costs and maintain profitability.
Now, Wix faces the challenge of growing its AI efforts while meeting investor expectations and keeping its finances stable in a more competitive tech market.
