Wix (NASDAQ: WIX), a dog of a company, laid off 1,000 people and said the primary reason was “fast evolution of AI capabilities.” Currency exchange rates were given as another reason
Wix is doing poorly enough that it may have had to make the cuts anyway. It had 5,200 workers before the cuts.
Wix is a development platform company. This sector has been under pressure because of a belief that AI software can do much of the work it counts on to make money
Wix was on the ropes based on its last financial results. RBC Capital Markets and Wells Fargo both downgraded the stock following the recent earnings report. Wells Fargo slashed its price target from $137 to $54,
The market has given up on Wix’s stock recently. Shares are down 49% this year compared to an advance of 12% by the S&P 500. It has dropped 69% over the last year.
In the most recent quarter, Wix revenue rose only 14% to $541 million. The company lost $57 million compared to a net profit of $34 million in the same quarter a year ago. Each number was considered a disappointment. Wix management said, “As such, we are maintaining our previous full year 2026 outlook and continue to expect both bookings and revenue to grow at mid-teens percentage on a year-over-year basis.” The year had gotten off to a slow start, management added.
Among companies with beaten-down businesses, the question is whether AI is the cause of job cuts rather than other problems, such as challenges in their business sectors or bad management.
No matter the reason for the job cuts, given recent earnings and Wall St. downgrades, Wix’s future is in jeopardy.
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