After acquisition, Cognition hits reset at Windsurf with layoffs and buyout offers
Just three weeks after acquiring AI coding startup Windsurf, Cognition reportedly laid off 30 staffers and offered voluntary exits to 200 others, signaling a sharp shift from its earlier promise to retain and reward the entire team.
ADVERTISEMENT
In a move that has sent shockwaves through the AI startup ecosystem, Cognition, an artificial intelligence company focused on automated coding, has begun a major restructuring of Windsurf, the rival firm it acquired just three weeks ago. According to a report by The Information, Cognition laid off 30 Windsurf employees last week and has offered buyouts to nearly 200 remaining staffers, giving them a chance to leave voluntarily.
The abrupt shake-up marks yet another chapter in what has been a volatile journey for Windsurf employees.
Earlier this year, the company was on the verge of being acquired by OpenAI. That deal ultimately fell through, and soon after, Windsurf suffered a major talent exodus. In a $2.4 billion reverse-acquihire deal, Google swooped in to hire the startup’s CEO, co-founder, and top research leads, stripping it of key leadership and deepening uncertainty for the team.
Cognition’s acquisition of Windsurf was supposed to stabilize the situation. At the time of the deal, Cognition publicly stated that all Windsurf employees would receive financial compensation and emphasized the value of the startup’s “world-class people,” calling them essential to its vision of building top-tier AI coding tools.
However, the layoffs and buyout offers suggest a stark pivot in strategy. The cuts appear to reflect an internal restructuring or cultural mismatch between the two companies, and raise broader questions about how AI companies are handling M&A integration in a hypercompetitive market.
For the Windsurf team, the buyout terms are not yet publicly disclosed, but the sudden change in direction, especially after promises of retention and recognition, has likely left many employees disillusioned. It also reflects how even high-profile, high-valuation AI startups are not immune to rapid shifts in direction when leadership, vision, or investor expectations evolve.
What happens next will determine whether Cognition can retain the talent it once called “world-class”, or whether this acquisition becomes another cautionary tale in the fast-moving AI wars.
