Tailwind laid off 75% of the startup’s engineering staff on Monday — and its CEO blames AI.
“75% of the people on our engineering team lost their jobs here yesterday because of the brutal impact AI has had on our business,” CEO Adam Wathan wrote in a GitHub comment that has made waves in the tech community.
Tailwind, like many startups, has a small head count. In a podcast posted on X, Wathan said that the company had four engineers on staff. Now, there’s one.
Wathan’s post highlights the challenges that startups, which already face tough odds of success, can encounter as AI models grow more capable.
The CEO founded the web developer tool in 2017. Tailwind’s model is free and open-source, with a paid “pro” tier driving the company’s revenue. In his GitHub comment, Wathan wrote that AI was making Tailwind more popular, but slimming its base of paid customers.
Traffic to Tailwind’s online documentation has seen a 40% decrease, Wathan wrote. Those resources were where people learned about the paid tier, the CEO wrote, crushing its ability to make money. Revenue is down 80%, he added.
The remaining team after the layoffs is the three owners, one engineer, and one part-time employee, the CEO said. “That’s all the resources we have,” he said.
🎧 Recorded a new morning walk this morning, hard one to share because I’m sure people will want to roast me for it but have been transparent up until now so publishing it anyways. pic.twitter.com/lslaLp2gtf
— Adam Wathan (@adamwathan) January 7, 2026
Wathan said he spent the holidays forecasting revenue and realized that the situation was “significantly worse than I realized.” The decline in revenue has occurred over several years, Wathan said, but it was gradual. If nothing changed, Wathan said his forecasting showed that Tailwind would not be able to meet payroll in six months.
The layoffs were a “brutal decision,” Wathan said. “If we didn’t do it now, then we we not be able to give people generous severance packages,” he said.
“I feel like a failure for having to do it,” Wathan said. “It’s not good.”
Tailwind is popular among developers, and Wathan’s post sparked reactions from the tech community on social media, some of which blamed the CEO for the company’s revenue decline.
One X user wrote that they had only received five promotional emails from Tailwind in 2025. “We don’t send enough email,” Wathan responded. “Definitely need to get better at it.”
Another X user wrote that Tailwind relied on a business model of selling UI components, while free and AI-generated equivalents grew.
“Still to this day don’t know what we should be pivoting to, so in the mean time it’s only made sense to do what’s at least working a little,” Wathan responded.
In his podcast, Wathan said that 90% of people understood and didn’t “pile on,” but others did. He carried the burden that, as an employer, the world “hates you and thinks you’re evil,” he said.
Others voiced their support online. Dropbox and Groupon alum Josh Puckett called the podcast an “incredibly raw, honest take from one of our industry’s best on the realities of running a business in the midst of the creative destruction AI is bringing.”
AI’s ability to summarize and extract information, sometimes without directing users to specific sites or documents, is threatening many businesses reliant on online traffic. The media industry is well aware of this, as a crop of startups has formed around the concept of “Google Zero.”
That’s basically what happened to Tailwind. It needed traffic to convert free users into paying customers, its CEO said, and AI effectively crushed that traffic. Still, Wathan remains hopeful for the company’s future.
“I’m still optimistic,” he said in his podcast. “My job requires me to be optimistic.”
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