Automattic: 8.4% staff cut amid escalating WordPress legal battles

This week, Automattic, the company behind WordPress.com, implemented a significant workforce restructuring through a voluntary buyout program called the Alignment Offer. This move came in response to ongoing legal disputes and internal disagreements within the company, set against a backdrop of escalating tensions in the WordPress ecosystem.

Key details of the Alignment Offer

The Alignment Offer provided employees who chose to resign by 20:00 UTC on October 3, 2024, with a generous severance package:

• $30,000 or six months of salary, whichever was higher
• Inclusion of pre-scheduled sabbaticals and parental leave, extending some packages to 9 months
• Immediate loss of access to Automattic systems upon acceptance
• Ineligibility for future re-hiring (known as "boomeranging" within the company)

Impact on Automattic's workforce

The offer resulted in significant changes to Automattic's employee base:

• 159 employees accepted the offer, representing 8.4% of the company
• 91.6% of employees chose to remain, forgoing a potential $126 million in total severance
• 63.5% of departing employees were male
• 53% of those leaving were based in the United States
• The Ecosystem/WordPress divisions were most affected, with 79.2% of departures
• 18 employees earning over $200,000 annually took the offer
• 4 employees initially accepted but later changed their minds

Automattic Alignment

Winston Churchill said, “Never let a good crisis go to waste.” Since I last blogged here, WP Engine filed a meritless lawsuit and Automattic responded, and there’s been a hurrica…

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Escalating disputes in the WordPress ecosystem

The Alignment Offer comes amidst a series of high-profile conflicts within the WordPress community:

1. WordCamp US 2024 Controversy: On September 21, 2024, WordPress co-founder Matt Mullenweg used his platform at WordCamp US to criticize web hosting company WP Engine, accusing them of exploiting the open-source WordPress project without sufficient contributions.
2. Legal Action: Following Mullenweg's public remarks, WP Engine initiated legal action against Automattic and Mullenweg personally. On September 23, 2024, WP Engine sent a cease-and-desist letter to Automattic, threatening further legal steps to protect its business, employees, and customers.
3. Trademark Dispute: The legal conflict centers around the use of WordPress trademarks. WP Engine claims rights to use the WordPress trademark, while Automattic asserts control over its usage.
4. WordPress.org Ban: On September 25, 2024, Mullenweg announced that WP Engine had been banned from WordPress.org resources, escalating the conflict further.
5. Countersuit: In the most recent development, WP Engine filed a lawsuit against Automattic and Mullenweg, alleging attempted extortion, interference, and trademark abuse related to WordPress intellectual property.

The ongoing disputes and Automattic's Alignment Offer have significant implications for the WordPress ecosystem:

• Potential disruption to the WordPress hosting market, where WP Engine is a major player
• Uncertainty for WordPress developers and agencies who rely on both Automattic and WP Engine services
• Questions about the future governance and trademark control of the WordPress project
• Concerns about the impact on WordPress's market share, which was reported to be stagnating.

Despite the reduction in workforce and ongoing legal challenges, Automattic appears poised for growth. Mullenweg announced that the company is actively hiring to fill newly opened roles. Additionally, Automattic has been pursuing other initiatives:

• A project to migrate Tumblr's backend to WordPress.
• A partnership with Perplexity AI for enhanced search capabilities on WordPress.com.

Reactions and perspectives

The news has generated mixed reactions within the tech community:

• Some praise the transparency of Automattic's process and the generosity of the severance package
• Others question the long-term implications of removing dissenting voices from the organization
• Concerns have been raised about the potential impact on WordPress ecosystem development and innovation
• Industry observers are closely watching how these disputes may affect the broader adoption and development of WordPress

Key Facts

• Date of Alignment Offer deadline: October 3, 2024
• Percentage of employees who accepted: 8.4%
• Total potential severance declined by remaining employees: $126 million
• Most affected division: Ecosystem/WordPress (79.2% of departures)
• Highest earners who took the offer: 18 employees making over $200,000/year
• Date of WP Engine's cease-and-desist letter to Automattic: September 23, 2024
• Date of WP Engine's ban from WordPress.org resources: September 26, 2024