Hi! Welcome to the forum
Sorry to hear your axolotl is getting less gilly!
this is very general because gill shrinkage happens for a variety of reasons, it might not even be sick. It could just be your water has lots of oxygen and your axolotl doesn't need them as much any more.
It could also be a sign of stress.
What temperature is the tank? Water which is too warm could be affecting his gills.
What are your water parameters? Do an ammonia test, if there is any ammonia in your water this could be the cause. How long have you had him/her for? If it is a new tank set up your cycle might not be doing too well and there could be toxins in the water. If you do not know already look up the
nitrogen cycle.
it could also be a sign of general stress, make sure he is cool, clean and has lots of places to hind around a tank with no gravel. IF you just got him recently he still might be stressed from the move and his gills might be adjusting to the new conditions.
the gills of an axolotl can vary greatly, an axolotl will very small or no gills will be in no real danger. They can absorb oxygen through their skin and also breathe from the surface with their lungs. It is not such a big deal health wise, its more just aesthetics, but it can also be an indicator for a larger problem such as stress so it is worth looking into.
Would you be able to give us a little more info? Some photos would be great too, of the axolotl and of his tank.
I hope it all gets sorted soon