Wix is preparing for the largest round of layoffs in its history, with the Israeli internet company expected to cut about 1,000 jobs, roughly 20% of its workforce, after weak financial results and a 50% drop in its share price since the start of the year.
The move comes as Wix faces eroding profitability and a changing technology landscape in which many roles are becoming less necessary because of artificial intelligence. At the end of the first quarter, the company employed 5,277 people, more than 60% of them in Israel.
Over the past year, much of Wix’s growth has come from Base44, the vibe-coding company founded by Maor Shlomo and acquired by Wix. The platform allows users to build software through natural-language prompts. While the operation is lean in terms of manpower, it requires heavy marketing investment and generates significant computing costs.
Several months ago, Wix management ordered employees to return to full-time work from the office, a move that sparked broad opposition inside the company and stirred debate across Israel’s tech industry. However, the company’s workforce shrank by only 63 employees in the first quarter.
Wix has also announced changes to the nature of its development roles in order to adapt them to the AI era. In retrospect, those moves can be seen as early steps toward a deeper efficiency plan.
The company currently trades at a market value of about $2 billion, after carrying out a $1.6 billion share buyback, a declarative move meant to restore investor confidence but one that has so far failed to achieve its goal.
Wix has been hit by negative sentiment toward software stocks over the past six months, even though it does not operate as a classic software-as-a-service company. Investors are concerned that its website and online store-building tools may become less relevant in the AI era, when users can create sites through vibe-coding tools.
To address those fears, Wix moved quickly to acquire Base44, developed by Shlomo as a natural-language programming platform. Although the activity is growing and allows Wix to offer an integrated AI product, the market remains unconvinced about the company’s future. Wix’s return to a loss in the first quarter was seen as another negative signal.
Wix reported a first-quarter loss of $57.5 million after several profitable quarters, despite a 14% rise in revenue to $541 million. Cash flow also fell 21% to $112 million. Wix attributed the move back into loss to a jump in marketing and sales expenses, as well as additional payments to Shlomo under the Base44 acquisition agreement.
In March, Wix launched its $1.6 billion share buyback, a major symbolic step that nearly emptied its cash reserves, which fell to $900 million. Operating expenses jumped 50% in the first quarter to $423 million, equal to 35% of revenue, compared with 21% in the corresponding quarter of 2025.
This year, Wix aired two Super Bowl commercials, one for its own products and another for Base44. In addition, strong demand for Shlomo’s vibe-coding tools, which pushed the platform to an annual revenue run rate of more than $100 million earlier than expected, requires Wix to make additional payments to him.
In the latest quarter, Wix paid Shlomo another $38 million and expects to make additional payments later this year. According to the company, Base44’s annual recurring revenue reached $150 million in May, well ahead of its targets.
The rapid growth of Base44 presents Wix with a double-edged sword. On one hand, it positions the company as a player advancing in AI and is likely responsible for most of its growth. On the other, it increases computing costs as usage expands.
Wix is also investing heavily in developing its own AI model. In a letter to investors, company founder and CEO Avishai Abrahami said the model would allow Harmony, Wix’s AI-powered website-building system, to become more accurate. For now, the project is another major expense, but the company expects it to reduce inference costs in the future.