Website Builder Industry Update: Squarespace Shifts to AI

Squarespace Cuts 19% of Staff as It Announces Forma, an AI Platform for Websites, Apps and Agents

NEW YORK, United States — November 4, 2026 — Squarespace is reducing its global workforce by about 19%, or roughly 300 employees, while announcing an AI-powered platform called Forma. The moves are relevant to the Website Builder Software Market, where established vendors are reorganizing around AI-led site creation.

The company confirmed the cuts in a statement to The Verge, saying the restructuring is meant to simplify operations and sharpen priorities. Most reductions affect product and engineering teams, according to an internal memo obtained by Business Insider.

CEO Anthony Casalena said the company must adapt its operating structure as the technology underlying its business evolves. That means smaller teams, fewer organizational layers, and more hands-on managers. He maintained that the restructuring was not designed to meet a specific financial target.

On November 2, Squarespace announced Forma, an upcoming platform intended to bring websites, applications, and digital agents together through a conversational interface. A beta is planned, with Squarespace Circle partners expected to receive early access. The company also announced AI-assisted website sections, tools for tracking visibility in AI-powered search, and integrations with other AI applications.

For context, Next Move Strategy Consulting’s report values the global Website Builder Software Market at USD 7.57 billion in 2025 and USD 8.41 billion in 2026. It is forecast to reach USD 15.97 billion by 2035, a CAGR of 7.38% from 2026 to 2035.

Key Highlights:

• Squarespace is reducing its workforce by about 19%, or roughly 300 employees, with most cuts in product and engineering.

• Forma is planned as an AI platform combining websites, applications, and digital agents, with a beta and partner early access to follow.

• The company said it would not characterize the layoffs as linked to increased investment in AI infrastructure.

• The restructuring comes about two years after Permira completed its roughly USD 7.2 billion acquisition of Squarespace in October 2024.

Analyst Insight:

According to analysts at Next Move Strategy Consulting, the shift from template editing to prompt-driven site generation is the most structurally significant change in website builder software, because it lowers the design-skill barrier for small businesses. NMSC analysts note that the report treats AI-assisted site generation as a growth driver, while price compression from low-cost AI builders and substitution by general-purpose AI coding tools are identified as restraints.

Industry Outlook:

Squarespace’s announcements reflect a broader move among website builder vendors from site creation toward software that supports wider business operations, such as bookings, customer communications, and automated workflows. The Forma beta and the pace of AI feature releases will indicate how vendors balance product investment against cost discipline in the coming quarters.

Source: TheStreet

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Prepared By: Sanyukta Deb