Tailwind laid off 75% of the startup’s engineering staff on Monday — and its CEO is blaming AI.
“75% of our engineering team members lost their jobs here yesterday due to the brutal impact of AI on our business,” CEO Adam Wathan wrote in a statement. GitHub comment it made waves in the tech community.
Tailwind, like many startups, has a small staff. In a published podcast onWathan said the company has four engineers on staff. Now there is one.
Wathan’s article highlights the challenges startups are already facing difficult odds of success, can be encountered as AI models become more efficient.
The CEO founded the web development tool in 2017. Tailwind’s template is free and open sourcewith a paid “pro” level which generates the company’s revenue. In his GitHub comment, Wathan wrote that AI made Tailwind more popular, but reduced its paying customer base.
Traffic to Tailwind’s online documentation saw a 40% decrease, Wathan wrote. It was in these resources that people discovered the paid tier, the CEO wrote, thereby crushing its ability to make money. Revenue is down 80%, he added.
The remaining team after the layoffs consists of three owners, an engineer and a part-time employee, the CEO said. “That’s all the resources we have,” he said.
🎧 I recorded a new morning walk this morning, hard to share because I’m sure people will want to roast me for it but I’ve been transparent so far so I’m posting it anyway. pic.twitter.com/lslaLp2gtf
–Adam Wathan (@adamwathan) January 7, 2026
Wathan said he spent the holidays forecasting revenue and realized the situation was “much worse than I thought.” The decline in revenue happened over several years, Wathan said, but it was gradual. If nothing changed, Wathan said his forecast showed Tailwind wouldn’t be able to meet payroll in six months.
The layoffs were a “brutal decision,” Wathan said. “If we don’t do it now, we won’t be able to offer people generous severance packages,” he said.
“I feel like a failure for having to do it,” Wathan said. “It’s not good.”
In a follow-up jobWathan wrote that he wanted to clarify that Tailwind was “a good deal (even though things are going down), but it’s no longer a good deal.”
“We don’t need anyone to rescue us, we have plenty of time and space to try new ideas and see what works,” he wrote.
Tailwind is popular among developers, and Wathan’s initial post about the layoffs sparked reactions from the tech community on social media, some of whom blamed the CEO for the company’s declining revenue.
A User wrote that they only received five promotional emails from Tailwind in 2025. “We’re not sending enough emails,” Wathan answered. “We absolutely have to improve.”
Another User wrote that Tailwind relied on a business model of selling user interface components, while free and AI-generated equivalents grew.
“As of today, we still don’t know what we should turn to, so in the meantime, it makes sense to do what works at least a little bit,” Wathan said. answered.
In his podcast, Wathan said 90 percent of people understand and don’t “pile on,” but others do. He carried the burden that, as an employer, the world “hated you and thought you were bad,” he said.
Others expressed support online. Josh Puckett, Dropbox and Groupon alumnus called the podcast an “incredibly raw and honest take from one of the best in our industry on the realities of running a business amid the creative destruction that AI brings.”
AI’s ability to summarize and extract information, sometimes without directing users to specific sites or documents, threatens many businesses dependent on online traffic. The media industry is well aware of this, since a multitude of startups have formed around the concept of “Google Zero“.
This is essentially what happened to Tailwind. It needed traffic to convert free users into paying customers, its CEO said, and AI effectively crushed that traffic. Wathan nevertheless remains hopeful about the company’s future.
“I’m always optimistic,” he said in his podcast. “My job requires me to be optimistic.”