Just three weeks after acquiring Windsurf, AI coding startup Cognition has laid off 30 employees and offered buyouts to the roughly 200 who remain, according to a report by The Information.

The layoffs and exit offer mark a rapid reversal from Cognition’s earlier messaging, which emphasized enthusiasm for Windsurf’s “world-class people” and promised that 100% of employees would receive financial compensation as part of the acquisition.

Now, insiders suggest the company’s focus was on Windsurf’s intellectual property, not its team.

The latest development is part of a tumultuous stretch for Windsurf employees. The company was previously in talks for an acquisition by OpenAI, but that deal fell through.

Soon after, Windsurf lost its CEO, co-founder, and research leads to Google in a reported $2.4 billion reverse-acquihire, in which Google hired the core talent directly rather than purchasing the company.

The remaining team was then brought into Cognition as part of a full acquisition.

According to an internal email obtained by The Information, Windsurf employees have until August 10 to decide whether to take the buyout offer, which provides the equivalent of nine months' salary.

Those who choose to stay face demanding conditions: six days a week in-office, and workloads exceeding 80 hours per week—terms that reflect growing concerns about the extreme demands placed on workers at top AI firms.

In the email, Cognition CEO Scott Wu justified the approach, writing:

“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.”

Q: What is Cognition offering to Windsurf employees?
A: A buyout option equal to nine months of salary, with a deadline of August 10 to accept.

Q: How many Windsurf staff were laid off?
A: 30 employees were laid off last week, just three weeks after the acquisition.

Q: What are the conditions for staying?
A: Remaining employees are expected to work six days a week and log 80+ hour weeks.

Q: What happened to Windsurf before the acquisition?
A: It was nearly acquired by OpenAI, then lost key talent to Google in a reverse-acquihire before being bought by Cognition.

Q: What did Cognition say about work-life balance?
A: CEO Scott Wu stated that the company does not believe in work-life balance, describing the mission as inseparable from personal commitment.

This rapid pivot underscores how acquisitions in the AI industry are increasingly driven by IP value, not workforce integration. Despite public statements about valuing talent, Cognition’s offer suggests that only the technology—not the team—was essential to the deal.

The conditions for those staying on reflect a growing normalization of extreme work culture in elite AI labs, where long hours and high pressure are framed as necessary to build “the future.” For a workforce already facing burnout and churn, the buyout option may feel less like a choice and more like a signal to exit.

At a time when talent wars and aggressive acquisitions dominate the AI landscape, the Windsurf saga is a stark reminder: in the race to lead AI, the people building it are often treated as secondary to the code they write.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.