At the end of May 2026, two of the largest independent website builder platforms announced significant layoffs in the same week and named AI competition as a primary cause. Wix cut approximately 1,000 positions (20% of its workforce) on May 28. Webflow cut approximately 140 positions (estimated at around 8%, exact figure not disclosed by the company) the day before.

Behind the headlines, the website builder market is splitting into three distinct segments. The platform gaining the most visible ground belongs to neither Wix nor Webflow.

Key numbers

  • Wix Q1 2026: revenue $541.2M (+14.3% YoY), adjusted EPS $0.68 vs $1.22 consensus (44% miss). Stock fell 27% in a single session after the May 13 release.
  • Wix workforce: 5,277 employees at end of Q1, approximately 4,200 after the cuts.
  • Webflow execution: affected employees’ laptops locked at 7am with no prior notice. Several held H-1B authorization and lost employment eligibility the same day.
  • Hostinger Horizons: 1 million users since launch. 93% to 95% had no prior paid web presence. Median time to first published site: 0.8 days.

Wix: The Financial Context Behind the Headline

Wix’s May 28 announcement was not the first signal of trouble. Q1 2026 results released on May 13 missed materially across nearly every line item. Revenue came in at $541.2 million, up 14.3% year-over-year but $2.4 million below consensus. Adjusted EPS was $0.68 against a $1.22 consensus, a 44% miss. Adjusted operating income hit $27.79 million against an estimated $68.76 million. The company posted a net loss of $57.5 million in the quarter, reversing several consecutive profitable periods. The stock fell 27% in a single session.

CEO Avishai Abrahami announced the layoffs via X on May 28, naming two causes:

  • Currency. More than 60% of Wix’s workforce is Israel-based, with costs in shekels and revenue almost entirely in dollars. The company projects a $64 million foreign exchange headwind on its 2026 expense base, primarily in the second half, as the shekel strengthens against the dollar.
  • Structural AI shift. Abrahami characterized AI’s impact as “the most significant shift in how companies are built since the invention of modern programming languages in the 1970s.” Wix is introducing new roles including “xEngineer” and “Creators” while eliminating positions outside the new model.

The company had recently completed a $1.6 billion tender offer buying back nearly 30% of its equity in early April 2026, weeks before the Q1 miss and the layoff announcement.

Wix has invested in three AI products in the past 12 months:

  • Wix Harmony. A natural language website builder powered by Wix’s own LLM, with an agent named Aria.
  • Wix Vibe. Headless AI building with direct code access for technical users.
  • Base44 acquisition. Code-free app-building platform with chat-based interface, acquired in June 2025 for approximately $80 million in initial consideration, plus additional earnouts paid through 2029. Base44 had reached $150 million ARR as of May 2026.

The Base44 deal signals where Wix believes the market is going: users describing what they want, with the platform handling implementation across the full stack. The execution question is whether Wix can manage this transition while reducing its workforce by 20% simultaneously.

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Webflow: A Different Diagnosis, A Different Pivot

Webflow’s situation differs from Wix’s in character if not direction. The company was not in obvious financial distress: no missed earnings, no stock collapse, no currency crisis. The pivot was strategic rather than reactive. CEO Linda Tong announced the restructuring via blog post on May 27, positioning Webflow as “the agentic web marketing platform” for enterprise teams.

The execution drew significant criticism. Affected employees had their laptops locked at 7am with no prior warning: no email, no calendar notice before the public blog post. Several affected staff held H-1B work authorization and lost employment eligibility the same day.

Webflow’s pivot rests on three specific product moves:

  • Webflow AEO (Answer Engine Optimization). Launched April 2026. A closed-loop system helping enterprise marketing teams manage how their content appears in AI-generated search results from ChatGPT, Perplexity, and Google AI Overviews. Includes Claude integration for designing pages, managing CMS content, and running audits.
  • Vidoso.ai acquisition. Acquired March 2026 to address AI-generated content authenticity.
  • Intellimize acquisition. Acquired in April 2024 for AI-driven personalization.

Webflow is repositioning from “the platform professionals use to build websites” to “the platform marketing teams use to manage their web presence in an AI-dominated discovery environment.” Whether enterprise marketing teams will pay Webflow-level pricing for that capability is the commercial question the pivot must answer.

How the Market Is Splitting

The AI website builder market reached an estimated $3.24 billion in 2026 and is projected to grow at a 20.55% CAGR to $17.43 billion by 2035. But the market is fragmenting into three distinct segments, each with different competitive dynamics and different winning products.

Design-first professionals. Framer has captured this segment through superior animation capabilities, AI-generated layouts via its Wireframer tool, and a reputation among startups wanting visually distinctive marketing sites. This segment is not particularly price-sensitive and not particularly threatened by low-friction AI builders, because its customers want control general-purpose tools do not provide.

Code-first developers building products. Tools including v0, Replit, Lovable, and Bolt.new generate single-page applications with exportable code, zero vendor lock-in, and integration with development workflows. These tools are not building websites in the traditional sense; they are building the first version of software products. 10Web bridges this segment with the WordPress ecosystem by generating complete WordPress sites from natural language prompts and hosting them on its own infrastructure, with a Vibe for WordPress product targeted at developers in the WordPress stack.

Mass-market AI-native builders. This is where the displacement of Wix and Webflow’s traditional customer base is most visible. According to figures published by Hostinger on its own blog, Hostinger Horizons has reached one million users since launch, 93% to 95% had no prior paid web presence, and the median time from starting to first published site is 0.8 days. The product generates a complete web presence, connects a domain, adds email, and bundles everything in a single package, removing the friction points traditional builders built their business models around. Durable occupies a similar position for local service businesses, combining the website itself with built-in CRM, invoicing, and basic marketing tools so the operator manages the business from one platform rather than stitching tools together.

The Hostinger-reported numbers above have not been independently audited; they are useful as a directional signal of where the mass-market segment is moving, not as benchmarked competitive data.

The hosting industry implications are significant and not uniformly negative. Hostinger’s bundled model is the approach gaining share. GoDaddy’s Airo attempts a similar bundled strategy. Bluehost’s WonderSuite wraps AI tools around WordPress. The providers succeeding are not those that built a better website builder. They are the ones that built a complete onboarding experience for the customer who never had a web presence and wants one in under a day. That customer, 93% of Horizons’ user base, was largely not being served by the existing market.

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The Pattern Repeats Across Generalist Builders

The structural pressure is not limited to Wix and Webflow:

  • WordPress. The platform entered its first sustained market share decline since rising to dominance in the early 2000s, with five consecutive quarters of decline through 2025 per W3Techs.
  • Automattic. Laid off 270 employees (16% of workforce) in April 2025.

The pattern is consistent across platforms whose business models depend on users spending hours learning a visual editor and managing their own content manually. That behavior is being replaced by tools that treat the website as a consequence of a brief conversation rather than a project.

Wix’s Base44 acquisition and its LLM investment represent a move toward the new market rather than a defence of the old one. Webflow’s AEO pivot addresses a need that is growing as AI-generated search results reshape how content is discovered. Neither company has yet demonstrated that its pivot has arrested the structural shift in its core customer segment. Both announced their pivots alongside layoffs, which limits execution capacity at the moment both strategies most need it.

Three Strategic Questions for Hosting Operators

For hosting providers thinking about their website builder strategy in light of this shift, three questions are particularly active in 2026:

  • Build, buy, or partner? Wix took the buy path with Base44 (June 2025, $80M plus earnouts). Hostinger built Horizons internally. Bluehost partners with WordPress through WonderSuite. Each path has different cost structures, different time-to-market, and different lock-in for the host’s own roadmap.
  • How tightly to bundle? The Hostinger-reported user growth came alongside a bundled offering combining the builder, hosting, domain, and email in one package. Providers selling these as separate add-ons may want to revisit their packaging, even before deciding which AI builder to integrate.
  • Which segment to serve? First-time site owners, design professionals, and developers building products are now distinct markets with different winning products. Providers trying to serve all three with a single builder may compete with stronger specialists in each.

The Hostinger data is the most concrete signal in the market right now: one million users, 93% first-timers, 0.8 days to publish, per the company’s own reporting. That is not a website builder metric. It is a market creation metric.