The drama at Windsurf, which had started off with a near-acquisition by OpenAI and ended with an acquisition by Cognition Labs, isn’t yet over.
Cognition Labs, the company which had acquired Windsurf and its remaining employees last month, has laid off 30 of these employees on 1st August, The Information reports. In addition, it has offered buyouts to 200 other employees. Windsurf says there are no more layoffs planned.
The buyout offers nine months of salary to 200 employees and must be accepted by August 10. CEO Scott Wu told staff they must either take the offer or commit to an “intense” work culture, including six-day office weeks and 80-hour workweeks.
“We don’t believe in work-life balance—building the future of software engineering is a mission we all care so deeply about that we couldn’t possibly separate the two,” Wu said. “We know that not everyone who joined Windsurf had signed up to join Cognition where we spend 6 days at the office and clock 80+ hour weeks.”
During the acquisition, Cognition Labs had called the Windsurf employees that were joining its team “world-class”. “The acquisition includes Windsurf’s IP, product, trademark and brand, and strong business. Above all, it includes Windsurf’s world-class people, whom we’re privileged to welcome to our team,” it had then said.
Windsurf’s employees have lurched from company to company in recent months. In June, it had been widely reported that Windsurf had been acquired by OpenAI. This had caused companies like Anthropic to pull their models from Windsurf, given how it was owned by a competitor. But Windsurf and OpenAI hadn’t officially announced the acquisition. It had later been reported that Microsoft, which is the biggest investor in OpenAI, had issues with the deal.
In July, the deal officially fell through, and Google acquired licensing rights to Windsurf’s technology for $2.4 billion, and Windsurf’s co-founders joined Google along with many Windsurf engineers. This left Windsurf’s remaining employees — which numbered around 250 — in the lurch, as they’d likely end up not making much money in the Google deal. But Cognition Labs had then acquired all of Windsurf, along with its remaining employees, and said that all employees would participate financially in the transaction.
But 30 of these employees have now been let go by Cognition, less than a month after the acquisition, and 200 others have been offered a buyout of 9 months of salary to leave. Employees who remain must commit to intense 6-day weeks and no work-life balance. This seems similar to what Elon Musk had done at Twitter after taking over the company — he too had sent out similar messages before cutting the employee strength of Twitter by 80 percent. It remains to be seen how Cognition’s moves play out — and to what degree Cognition wants to support Windsurf as a separate product given recent events — but it shows that in the cut-throat world of AI, it’s never over until it’s truly over.
Update: Cognition CEO Scott Wu has said that they had cashed out four years of equity for everyone from Windsurf. “Regardless of their decision, we accelerated and cashed out all four years of equity for everyone from Windsurf, even for the 85% of employees who hadn’t hit their one year cliff. And for those who opt out, we’re providing an additional nine months of pay on top of this,” he posted on X.