Automattic, the parent company of WordPress and Tumblr, has announced a significant workforce reduction, affecting 16% of its global staff. The decision, confirmed in an official blog post by CEO Matt Mullenweg on Wednesday, impacts employees across 90 countries. While the company has not disclosed the exact number of job cuts, estimates suggest that approximately 281 employees have been affected.

The restructuring aims to enhance agility, address inefficiencies, and ensure a financially viable model for long-term success. Despite continued revenue growth, Automattic cited the need to improve productivity and profitability in an increasingly competitive and rapidly evolving technology landscape.

The layoffs come at a challenging time for Automattic, which has been entangled in a legal dispute with hosting provider WP Engine. The disagreement, centered on WP Engine’s alleged failure to adequately contribute to the open-source WordPress project, has already contributed to internal tensions and employee departures over the past year.

In his announcement, Mullenweg framed the layoffs as a necessary step to safeguard the company’s future. “While our revenue continues to grow, Automattic operates in a highly competitive market, and technology is evolving at unprecedented levels,” he stated. “To support our customers and products, we must improve our productivity, profitability, and capacity to invest.”

However, the widespread nature of the job cuts has raised concerns among employees and industry observers regarding the company’s stability. Reports indicate that multiple divisions have been affected, including WooCommerce, Tumblr, and Automattic’s AI-focused initiatives. In the US, the layoffs have impacted roles across sales, marketing, product management, design, and business operations.

According to a report by TechCrunch, affected employees were notified via email and immediately lost access to internal communication platforms such as Slack. The sudden and impersonal nature of the dismissals has left many employees, including long-term staff with over a decade of service, in shock.

Adding to employee concerns, Automattic has also cancelled its annual “Grand Meetup” company retreat for 2025. The event has traditionally served as a key moment for team bonding and strengthening company culture, and its cancellation signals further cost-cutting measures.

Despite the abrupt nature of the layoffs, the company has offered severance packages that include nine weeks of pay, retention of company laptops, and access to job placement resources.

Mullenweg remains confident that Automattic will emerge stronger from this transition. “Automattic has multiple products with world-touching potential in WordPress and beyond,” he stated. “I’m confident we will come out of this situation in a better position, poised to create a vibrant, profitable, well-designed company that will continue our mission to democratise the internet.”

While the CEO’s optimism suggests a commitment to future growth, the impact of these layoffs—both internally and in the broader tech industry—remains to be seen. The restructuring raises questions about the balance between financial sustainability and employee morale in an era of rapid technological change.