Automattic, the company behind WordPress, is cutting back on its workforce. 16 percent of the workforce will be laid off, according to a blog post published by the company on Wednesday. The layoffs are just another episode in a turbulent year for both Automattic and Automattic CEO Matt Mullenweg.
Automattic, which according to its own website has 1,744 employees, will reportedly let more than 270 people go. CEO Matt Mullenweg says this restructuring is necessary due to the competitive nature of the market and the speed at which technology is developing.
A turbulent year
The round of layoffs follows an eventful period for the company. Automattic is embroiled in a legal battle with hosting company WP Engine. This conflict already led to the departure of several Automattic employees last fall. According to Mullenweg, WP Engine did not contribute enough to the open-source project WordPress.org, while the use of the ‘WP’ brand would cause confusion about its ties to WordPress itself. The latter is not something that is legally enforceable.
In January of this year, Automattic announced that it would drastically reduce its contribution to WordPress Core, from 2,560 hours per week to just 45 hours. This decision was the result of the ongoing conflict with WP Engine and financial pressure from investors. BlackRock devalued its investment in Automattic by 10 percent in December, the latest in a series of devaluations.
Mullenweg has also had a turbulent year personally, in which he made bold statements on both X and in live streams about WP Engine and Yoast creator Joost de Valk, among others. The latter was even banned from WordPress.org and is therefore no longer allowed to contribute to it.
Strategic reorientation
In Wednesday’s announcement, Mullenweg explains that the layoffs are intended to make the company more ‘agile and responsive’. They are also intended to help ‘break down silos that cause inefficiency’, renew the focus on product quality and guarantee a viable financial model for long-term success.
“To support our customers and products, we must improve our productivity, profitability, and capacity to invest,” the blog post written by Mullenweg says.
The layoffs affect employees in 90 countries. They will receive severance pay and help finding a new job. According to TechCrunch sources, the layoffs has taken effect immediately; people received an email and immediately lost access to their Slack account. Long-term employees who had worked for the company for more than ten years were also affected.
AI investments
It is noteworthy that Automattic is still actively acquiring new companies despite the wave of layoffs. In December, it acquired WPAI, a startup that builds AI solutions for WordPress. WPAI’s products include CodeWP, which allows users to use AI to create WordPress plugins.
It seems that Automattic, despite the cutbacks, continues to invest in AI technology to strengthen its position in the WordPress ecosystem. The founders of WPAI have joined Automattic to lead the company’s AI initiatives.
Broader pattern in the tech sector
As unorthodox as Mullenweg may be, rounds of layoffs are anything but uncommon in the tech sector, even in 2025. Earlier this year, IBM announced it would be laying off thousands of employees in various departments. Other large IT companies have also implemented major layoff rounds in recent years, often with a rise in share price shortly afterwards.
Despite everything, Mullenweg remains optimistic about the future of his company. “Automattic has multiple products with world-touching potential in WordPress and beyond. 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 democratize the internet.”