Tailwind Labs lays off 75 percent of its engineers thanks to 'brutal impact' of AI

Updated: Tailwind Labs CEO Adam Wathan, inventor of the popular open source Tailwind CSS framework, this week confirmed that “75 percent of the people on our engineering team lost their jobs” due to the “brutal impact AI has had on our business.”

The layoffs equate to just three people but nevertheless amounting to 75 percent of the software engineers on the team, since Tailwind Labs is a small company. The remaining staff are three co-founders, plus Robin Malfait and Peter Suhm.

According to Wathan, Tailwind usage is “growing faster than it ever has” but revenue is down by almost 80 percent. The reason he gave is that use of AI tools and agents means traffic to the documentation on the website has dropped by 40 percent in two years, meaning developers do not discover the commercial plans which sustain the business.

Tailwind CSS is the most popular CSS framework among respondents to the 2025 State of CSS survey, used by 51 percent of them. Along with sponsorships, the project is monetized by component packages, available for application UIs (user interfaces), marketing websites, ecommerce sites, or all three together as Tailwind Plus. These are inexpensive lifetime subscriptions – but if AI fetches and installs Tailwind CSS behind the scenes, or answers questions in chat so that developers never visit the site, the commercial plans will not be seen or purchased.

The consequent financial pressure on Tailwind Labs was revealed when an open source contributor sought to merge an update to the documentation that merged all the text into one file optimized for LLM (large language model) consumption. Wathan closed the GitHub issue stating that the update would make the business “even less sustainable.”

Users pushed back, saying that closing the issue was “very OSS [open source software] unfriendly” and making the software easier to use would increase take-up – prompting the outburst from Wathan. The CEO said that fixing the sustainability of the project was his first priority, to avoid Tailwind CSS becoming “unmaintained abandonware when there is no one left employed to work on it.”

Another observation was that the value of packaging best-practice components has dropped because of AI. “The UI kit costs $299! I can run thousands of AI queries for that price and customize whatever I feel like,” argued one user, who said he has a commercial package but does not use it.

It is also possible that offering lifetime subscriptions makes sustainability harder, since new revenue has to come from new customers. The Tailwind plans even include future updates. A better strategy would be “gatekeeping features behind new major versions where you need to pay for an upgraded license,” said another developer.

Yesterday Wathan posted an X podcast about the business sustainability issues. Following forecasts during the holiday break, he had concluded that “if nothing changed, then in about six months we would no longer be able to meet payroll obligations.”

Wathan said in another post that he is “excited about AI” but still trying to work out how Tailwind can “thrive in this new world.”

Although issues with open source sustainability are not new, the explosion of AI tools is having a dramatic impact; the collapse of Stack Overflow questions is another example.

The Tailwind CSS framework is well-liked, and it is probable that AI tooling has increased its usage while at the same time harming the business model behind it.

Update at 09.19 on January 9, 2026, to add:

Following publicity for Tailwind’s situation, new sponsors have come forward. Vercel founder Guillermo Rauch said on X that his company will sponsor Tailwind CSS, and that “Tailwind is foundational web infrastructure at this point (it fixed CSS).”

In addition, Logan Kilpatrick, group product manager for Google AI Studio, said that “we (the GoogleAIStudio team) are now a sponsor of the @tailwindcss project.”