Squarespace lays off 19% of staff as AI site builders reshape the market

Squarespace is cutting roughly 19% of its global workforce, eliminating around 300 jobs at one of the best-known names in website building and hosting. Jeff Seedman, a public relations specialist representing Squarespace, confirmed the layoffs to TechCrunch; The Verge initially reported them.

The company framed the move as a restructuring, not a retreat. "The changes are intended to simplify how we operate, sharpen our priorities and enable the company to move faster as we position Squarespace for its next phase of growth," Seedman said.

That language follows a familiar corporate template. What it does not say is why the company needs to simplify now — and the surrounding market shift supplies the likely answer.

Why does this matter for the website-building industry?

Website building has changed immensely over the last few years as a result of the generative AI boom. So-called "vibe-coding" website builders — tools that require only simple prompts from users to spin up functional frontend designs — have largely upended the industry. Users can now create sites with significantly less effort than Squarespace's template-and-drag-and-drop model historically demanded.

These AI-generated sites have become an increasingly central part of the website-building business, and the money flowing into the category shows it:

• Wix, a direct rival of Squarespace in web hosting, bought the AI app builder Base44 for $80 million last year.
• Lovable, a similar prompt-to-site offering, raised a $400 million Series C round in August at a $13.3 billion valuation.
• Google recently launched Stitch, a feature that lets users swiftly generate user interface designs.

Takeaway: the money and the products in this market have moved decisively toward generating sites from plain-language prompts.

What is Squarespace's own AI answer?

Squarespace has not stood still. In 2024, the company launched an AI tool called Blueprint, aimed at streamlining site creation. More recently, it announced Forma, an upcoming AI-native platform that users can currently join via a waitlist.

The gap between those announcements and this week's layoffs is the story's open question. Forma has no launch date, no pricing and no publicly detailed capabilities yet — only a waitlist. Until it ships, Squarespace is competing with the Lovable generation using a product line built for the pre-prompt era.

Takeaway: Squarespace has AI products, but its newest one is still a waitlist, and rivals' AI tools are already funded and live.

How did Squarespace get here?

The company's path over the past two decades explains some of the pressure. Squarespace was founded in 2004 and went public in 2021 at a $10 billion valuation. It then struggled in the ensuing years to generate enthusiastic public-market interest — a fate shared by several mid-sized software companies that IPO'd during the pandemic-era boom.

Squarespace ultimately decided to go private again through a $7 billion private-equity deal in 2024. That transaction valued the company at roughly 30% below its IPO valuation, and private-equity ownership typically brings cost discipline of exactly the kind announced this week.

A 19% workforce reduction at a PE-owned incumbent facing a generational product shift reads as both responses at once: an efficiency mandate from owners and a repositioning for a market where prompts, not templates, are the interface.

Takeaway: a company that went from $10 billion public debut to a $7 billion private buyout now has new owners and a new technology cycle to answer for.

What happens next?

Squarespace says the restructuring will let it "move faster" into its next phase of growth. The proof will be Forma: whether the AI-native platform ships soon, works well enough to compete with Lovable, Base44 and Stitch, and does so before prompt-built websites become the default way small businesses get online. Until then, 300 jobs are the down payment on that pivot.