Restructuring Announcement
(automattic.com)245 points by markx2 a day ago
245 points by markx2 a day ago
He'll never admit he was wrong or step down. He'll drive Automattic into the ground and Wordpress along with it (until someone forks it, like say...WP Engine, heh. Or Redhat, or IBM, or some huge web design firm, etc.)
He considers Wordpress "his" even though...he took it over from the original author who was abandoning the project.
It reminds me of the rage-bender Jamie and Jim Thompson went on, attacking OPNsense for "stealing" their work and doing a lot of immature things taking over opnsense's domain, their subreddit, etc. via legal actions. And at least one lawsuit. They lost on every front - reddit gave the subreddit back to the opnsense developers, ICANN gave them back their domain name, etc.
Attacking OPNsense for "stealing" pfSense was pretty rich given pfSense's origin; netgate slapped their logo on m0n0wall and started working on their fork. Which is exactly what opnsense did that enraged them...
Especially as pfsense software started getting more user-hostile and shifting functionality into the paid versions, pfsense has rapidly become less and less popular. I almost never see anyone recommend it anymore.
> He considers Wordpress "his" even though...he took it over from the original author who was abandoning the project.
Non Wordpress user here, not a blogger, don’t use CMSs. Curious about this line. Reading the history on Wikipedia, the original b2 was the precursor. It was pretty small and being abandoned. Matt proposed forking it in January 2003, and worked with Mike to bring the first version to fruition a few months later. 22 years later it’s a goliath.
Given that history it seems totally fair for Matt to consider WP his thing. You don’t seem to think so, can you explain?
That's all true and does not conflict. There is nothing to explain.
You can trust me, facile3232, instead. I will improve upon all things the leader of automattic.com failed to improve upon.
Huh.
>> There are no layoffs plans at Automattic, in fact we're hiring fairly aggressively and have done a number of acquisitions since this whole thing started, and have several more in the pipeline.
https://old.reddit.com/r/Wordpress/comments/1hxnh73/automatt...
That was important posturing to make sure that everyone knew that his nuclear war on WP Engine was absolutely not going to impact his ability to run the business and the WordPress project. Whether it was true or not it didn't matter at the time, the important thing was to keep up appearances and not let anyone on Reddit think they knew better than Matt.
It's not uncommon for companies to be in a hiring mode until they're very much not in a hiring mode any more.
Yeah. I was made a manager in Feb 2022 with 5 directs and 9 headcount to fill. Hired 5, and then by June 2022 all remaining headcount was cut. In January 2023 we had our first-ever layoffs in the company's 25-year history.
It is so hard to fathom that a leader trusted with millions of dollars of other people's money can be so disengaged from recruiting as to not see a hard wall of cash crunch, months if not years ahead.
You can't assume fundraising will always go swimmingly. You have to always be in survival mode, and if that means not hiring aggressively, then you put on the breaks until the money comes in .
Either as a leader you are clueless about your business cash needs, you are clueless about risk management, or you are clueless about the market, all of which make you not a suitable leader for a long-term company.
How infuriating for anyone recently hired caught in this trap.
It seems to me the obvious, from both a business & human perspective, is to stop hiring at first signs of trouble, before layoffs. To do so otherwise is cruel.
I doubt Matt had zero idea about this possibility two months ago.
This will continue until there are actual consequences for those responsible.
I'm of the mindset that any time a company does layoffs, they should start from the top And work down.
>I'm of the mindset that any time a company does layoffs, they should start from the top And work down.
Oh, to be young and idealistic again! So in your world, the people running the business should fire themselves first?
> I'm of the mindset that any time a company does layoffs, they should start from the top And work down.
I'm off the mindset that employment should be voluntary: both by the employer and the employee. It makes employers reluctant to hire if they know they can't get rid of people again.
(I'm a socialist at heart and think it'd be pretty nice for the government to take care of people who lost their jobs. Just tax the companies a little more!)
Those lacking empathy don’t know how to not be cruel. They keep filtering to the top unfortunately. Something that remains to be solved for.
There is nothing to solve - you are in the game of capitalism (the American Edition) and the job is to maximise shareholder value. They are paid big bucks because they only work for that without empathy/cruelty or such emotions. The only way to solve is to change the game but that's next to impossible because most powerful players like it that way and will turn on anyone trying to change their fattening ways.
The best part is that the pawns keep getting sacrificed and do nothing to change it; not only that, they refuse to support anyone trying to change the game to make their lives better. It's amazing.
The business world changes direction faster than companies can adapt. That was my biggest lesson as an entrepreneur: entrepreneurs don't really pivot into product-market fit, the market pivots into them. The reason capitalism works is because there's this huge sea of dream-chasers out there, most of whom will go bankrupt, so that when the market's needs change there is somebody out there to service them, and everybody who's not effectively servicing them goes to hell and gets another job.
Corporations and management basically exist to buffer this uncertainty. Employment is actually a really bad deal in good economic times; owners reap almost all the windfall of having a successful product. But in bad times, the company keeps paying you even if they're losing money, at least up until they don't. You get a raw deal, but not as raw a deal as the people paying you.
Likewise with strategic direction. The market's needs change faster than senior executives can adapt: if they always produced what the market was actually clamoring for, the company would run around like a chicken with its head cut off (this actually happens when the CEO panics, and a key CEO skill, and part of the reason they're paid so much, is the ability to ignore every piece of market data saying "You're not hot anymore. Nobody wants you, and the market has moved on" and keep doing what you're doing even though your intuition is telling you that you're doomed and going to lose your cushy $20M/year job). Much of the job of middle management is to buffer senior management's freakouts and tell the ICs "Keep calm and carry on; let's see if he still cares about this new hotness next week."
I've worked at a couple consultancies who played themselves by investing too heavily in one or two customers.
Once a single customer is 1/3 of your revenue they can start extracting considerations from you that may not be what your employees thought they signed up for. It's a good way to end up being a body shop. I don't have a philosophical problem with body shops per se, it's just that I don't want to work for one, so I pick places that should know better, but sometimes don't.
It can also be problematic if 2 customers account for 45% of your revenue and they both get the same idea, which can happen particularly when the market shifts. You have no way to call their bluff and move enough people to other projects to make it stick.
>The market's needs change faster than senior executives can adapt: if they always produced what the market was actually clamoring for, the company would run around like a chicken with its head cut off (this actually happens when the CEO panics, and a key CEO skill, and part of the reason they're paid so much, is the ability to ignore every piece of market data saying "You're not hot anymore. Nobody wants you, and the market has moved on" and keep doing what you're doing even though your intuition is telling you that you're doomed and going to lose your cushy $20M/year job)
You know what I absolutely hate about this take? It ignores my shared experience I've had with others (IE, its not just me). I've worked in this industry a long time. So I've inevitably worked for places that ran into financial trouble. In multiple of those cases, it could have been prevented if upper management actually listened to what those of us developing the product had to say about shifting customer behaviors and expectations, that what we were seeing was different from what they were trying to sell and have us develop. It always ended in disaster.
They refused to listen, but never paid the price for that failure, my colleagues did and in one instance, I was on the receiving end of a layoff along with others as well.
That's a lot of words from someone who doesn't know what's been going on for ~6 months or so that is relevant.
Mullenweg lost his mind and attacked a competitor to Wordpress hosting (WP Engine) and kept doubling down and only served to demonstrate how much of an unhinged asshole he was.
Along the way he pissed off the Wordpress community - the worry was that if anyone else pissed him off (which could include he'd accuse them of using the Wordpress name or even "WP", even if it was descriptive (which is entirely permitted use of a trademarked name) and run up a bunch of legal expenses for them.
Angry-at-the-world blog post after blog post doubling down over and over. Taunting people as he banned them from the Wordpress slack, that sort of stuff. Then he blocked WP Engine from accessing the Wordpress.org plugin and theme registries which meant a huge number of sites couldn't update plugins or themes.
Then he announced Automattic was going to cut back engineering hours to (if I remember right) one full time staffer. One person to keep up with security updates and bugfixes of a very complicated piece of software used by a lot of organization.
Incredibly childish and thoroughly demonstrated to the world that he was unsuited for leading a company and being the sole person almost completely in charge of a piece of software used by a 20-30% of the websites in the world.
This was absolutely foreseeable, especially when he cut back Automattic's engineering to 40hr/week.
I advised a client a few weeks into the drama to at least keep in the back of their minds that they might have to migrate at some point as "the CEO of the company is off his rocker, they probably will start to struggle with security updates, and the company may go out of business."
The median position is to be hiring, just to backfill attrition. "Trouble" might be temporary; it might be noise. Hiring is always slow, with cycles longer than "trouble" might last.
We might argue about the parameters in this situation, but structurally there's a bias towards the low-pass average.
The exuberance and self-assuredness that your plans are going to work out leads to overreach and I think the lag in accounting practices helps make that more acute.
I have had too many experiences where I thought my current employer was about to start circling the drain, and I've ended up some place that was circling faster. At a guess I'm about 50:50, which I suppose I should count as 'lucky' but has never felt that way.
Fish-tailing is a common flame-out mode for startups. VCs are partly to blame. They don't like to discourage you in case you come up with a miracle, but neither do they want to put good money and time after bad if it turns out you're going to be a break-even play or a loss.
Its not even cruel. Its just dumb. Really dumb.
You are going to invest significant resources into hiring, onboarding, and injecting new staff into workflows for people that will not be there as soon as they are actually productive.
So its not just the cash burn - its the tieup of 3x team members to getting new people trained to become effective and successful contributor. Time is finite.
It makes no sense to throw away all that time spent by your team, who could have use that same time to get a few more features out, proposals sent , or projects spec'd instead.
Financially your best bet is to be in the 1st round of layoffs. Ego-wise, it's best to be in the second round. First round there's still some money and a lot of guilt, so the severance tends to be good.
By the time they lay off truly essential people, you're burnt out, and you're lucky if you don't have to sue to get what you're owed by law, let alone whatever policy they had for paying out vacation time or what have you. You also get to enjoy a fun period of survivor guilt when they laid off people who you think have contributed as much or more than you have, and then know that you'll be next if they laid of <person> already.
Your also competing with fewer people when looking for a new job.
Relevant comment from 24 days ago: https://news.ycombinator.com/item?id=43309837
Not especially surprising, but there’s an awfully large elephant in the room that likely directly contributed to this necessity that goes completely unmentioned.
Matt's only real problem is not owning his ambition openly.
Trying to publicly argue the moral high ground was a stupid, unforced error.
It didn't need to be moralized at all. Just make the changes you want to make, piss off a vocal minority, then get back to winning and making boatloads of money by executing exceptionally.
The problem, I suspect, is that Matt values how certain people perceive him more than he values winning. It's unfortunate, because he's clearly a very good executer and strategist. He's getting in his own way.
> he's clearly a very good executer and strategist. He's getting in his own way.
Apparently not. I'd argue he was perceived as such but has thoroughly proven the opposite by now. There were so many stations to get off the train.
Ignore the financial valuations, man is a worm. I'd call him a 'hack' but that might imply talents given where we are.
Through his shitshow, he tried - and failed - to curry favor with an OSS puppet. Not any particular software... like one might think, but the whole "thing".
There was never any moment where WPEngine was beholden for offering WordPress services. Everything was strained to the point he was trying to redefine OSS.
He got in his way, ours as members of the public, and that of WPEngine. Repeatedly... and I don't see enough reflection/reason from Matt to believe this will change. Personally, I'd hesitate to promote his strategies or skills.
Hamfisted is a better message. Or none, take the wind away. We don't want his ambition or to hear about it. It's demonstrably shit.
Edit: just in case this needs saying, I've never been affiliated with either company. Don't waste your limited time looking for me, Matt.
IMHO moralizing wasn't really the problem.
The extremely erratic behavior, the ego, the fixation with vengeance, harassing organizations legally using the Wordpress name, abusing his power at the wordpress foundation, using it to punish Automattic competitors...
He pissed off a lot of people, but worse: he made a lot of people nervous.
> This restructuring will result in an approximately 16% workforce reduction
Probably the most salient detail for non-Automattic employees. Everything else was generic fluff.
> non-Automattic employees
non-Automatticians. Yes, they literally used this term in TFA.
I know this really bugs some people but every tech company these days has a demonym for its employees.
It doesn't mean that employees have some cultlike adoration for the company. It's just very convenient inside the company to have a single short word to refer to all employees of the business.
> a single short word
> “Automattician”
The word you’re looking for is employee.
> It doesn't mean that employees have some cultlike adoration for the company
No, but it does mean that the company wishes that employees had some cult like adoration. The line between proud of the company one works for and being cult like is not rigid, and moves depending on the company
I get it, it's just kind of a meme at this point after a couple years of these boilerplate RIF announcements. Cmd-F for "difficult decision" + whatever the demonym is and you're basically guaranteed hits.
It’s looking like countries with better worker protections saw zero layoffs.
Given what I know of the situation (which admittedly isn't much), wouldn't the best course of action be to shitcan the CEO?
From Reddit discussions, if they can be trusted, there is nobody who can remove Matt from any position. It's a private company and the investors were given non-voting shares.
> It's a private company and the investors were given non-voting shares.
My understanding is that the investors signed proxy voting rights over to Matt. They are mostly ordinary shares, and may be revocable. [1]
Let this be a lesson to anyone investing in a startup: don't give any cash unless there's real corporate governance.
For the unaware (or under-aware): https://en.wikipedia.org/wiki/L%27%C3%89tat,_c%27est_moi
Probably apocryphal. A lot of people these days only know it from Star Wars.
wait, did he put his name in the company name?
if so, that's what we in the narcissist-identifying business call a "tell".
Yes but this isn't really much of a crime or tell to me. The name is great as far as I'm concerned.
And he's full of himself and completely wrong in this crusade he launched for some reason, completely indefensible acts left & right for over a year.
Both true.
It's easy to call that a "tell" in light of Matt Mullenweg's recent activities. No one was saying shit when Wordpress was the darling of Web 2.0.
Justifiable evidence of Matt Mullenweg's unhealthy/excessive narcissism only surfaced within the past year or so (I'm fuzzy on the timeline, cut me some slack ya?). Automattic the company has been so named for, goodness, close to twenty years now.
It could be Matt's been a narcissist from the start. But people also change and not always for the better so maybe he became a "narcissist" much later in life and his chosen company name just so conveniently fell into the narrative.
There are CEOs in bigger spotlights with a bigger case for narcissism who don't put their names on any of their companies (emphasis on the plurality). One of them has a name with a similar inflection pattern to other well-known albeit fictional narcissist, Tony Stark.
I don't know what "Automattic" as a company name says about Matt as a person. I'll tell you what it is though: a damn good pun, one I would gladly score myself given the chance.
Yeap, Automatic is not a good trade name but Automattic is great!
Yes. He also calls the employees Automatticians. So they're all just Matt.
Mentioning "our revenue continues to grow" seems quite out of place in an announcement like this.
I disagree - it's not properly addressed, but it's nice to see it at least brought up.
Layoffs are always awful, but seeing companies talk about "changing economic realities" amongst continuing revenue and profit growth - often all time highs - is a real morale killer for those who are left behind.
Microsoft/Amazon/Alphabet/Google are trillion dollar megacorps who are insanely profitable, but they're firing people because they no longer have to pretend we care about you at all and will instead try to cater to Wall Street (who will never be happy - if I had $10000 for every quarter where a big tech corp "beat expectations" and the stock dropped anyway I'd retire). It's a hard pill to swallow and will increase bitterness and cynicism in the remaining workforce and kill any chance of your employees caring about your vision or putting in any extra effort.
> they no longer have to pretend we care about you at all and will instead try to cater to Wall Street
The company isn't "catering" to wall street, wall street is their boss. The owners of the company vote on what they want the company to do, and hire the person in charge of the company. And besides, do you care about your company? If you got a job offer to make twice your salary doing something you'd enjoy more than what you do now, would you stay with your current company out of care for them? Maybe you would, but I know of almost no one who feels that way towards their employer, outside of those working for small tech startups with their friends.
For almost everyone I know, their mindset is that they're going to do the best job they can right up until something better comes along, at which point they'll switch to something better. And I fully expect that if my best work is no longer worth more to them than my salary, they'll lay me off. In the meantime, they're paying me a ridiculous amount of money to do a job I enjoy. It's a deal that 99% of the world is envious of, and I don't think it should inspire bitterness and cynicism
> they're paying me a ridiculous amount of money to do a job I enjoy
> It's a deal that 99% of the world is envious of, and I don't think it should inspire bitterness and cynicism
First of all, I think it takes a lot of guts to continue to have this attitude in the current economic climate. Or, in your case, immense skill, but not everybody - not even everybody in the big tech companies - has that.
I think the bitterness and cynicism stems from not enjoying the work. As crazy as this sounds - it's the intangibles as much as the cash: for example, knowing the company will fight your efforts to improve things.
In this case, the "our revenue continues to grow" is not transparency, it's deliberately obfuscating the increase in expenses that led to layoffs being necessary. Not mentioned is the insanely expensive legal battle that they launched with WP Engine, which is already a massive drain on resources and a huge financial risk given how strong WP Engine's case is.
"Our revenue continues to grow" doesn't matter if unnecessary expenses outstrip it.
When was anyone naive enough to think their company cared about them?
On the other hand, why should a company keep people around that they don’t need?
And the last point, speaking more about Microsoft/Amazon/Google, if you have worked for either company for any length of time, there is no excuse for you not to have a nice nest egg to tide you over especially considering the severance amounts they give you.
You might be forced to sully yourself and become an “enterprise developer” and make around what most of the 2.8 million developers in the US.
And yes, I did a bid at Amazon and within three years, I paid off some debt, saved a chunk of change, got my 3.5 months severance package and found another job quickly that was my target compensation (not enterprise dev).
If opex is growing at a faster rate than revenue, and it’s not a VC situation, then layoffs are a popular way to curtail opex — typically business leadership cannot effect changes that would eventually impact themselves, so, the board and executive layer prefer to mass-layoff workers and middle management first and then let the remaining leadership fight for their life to present optimized plans. This is of course a terrible approach, because — as Taskmaster quite enjoyably demonstrates — even the smartest people tend to make a lot of asinine judgment calls under duress and deadlines; but when the alternative is to admit weaknesses of leadership, it’s certainly a logical enough course of action.
> They also have our enduring gratitude for their time with the company.
I hope the RIF'd employees can pay rent with that gratitude.
If I were considering using Wordpress for anything, which I am not, this would end those plans. If they're laying off and keeping the CEO, they must be in dire financial straits. That message says "we're doing all the right things and have good leadership with a track record of making good decisions, but we have no alternative but to fire a sixth of our employees". That's not a good sign.
I used to be a big admirer of Matt and Automattic, but after this whole WP Engine episode I've lost respect. I shut down my old wordpress blog, still working on importing the posts as org-mode files onto my new site, I no longer recommend WP to non-techies that ask me how to build a website.
I hope WordPress (and Automattic) turn the ship around but its not looking good at this point.
I wonder if the CEO throwing a tantrum that another company was using "their" open-source (thus, not theirs) code wasn't the real problem, but it made investors take a closer look, and they noticed that Automattic has less of a moat then they thought.
I actually started paying the subscription for my Tumblr account a couple years ago. I don't get much direct benefit from it, I do it because it's the only social media site I use and enjoy, and I was hoping it would help keep it from shutting down. 60% workforce reduction is not great.
i dont mean to kick a dead horse, but a "few remaining engineers" for what is effectively an outdated clone of a microblogging site, a few engineers, seems like a lot still
I'm wondering the same thing. Considering they were just acquired, I'm concerned. Especially since as far as I know, they still are operating under a free model.
HR wranglers? Damn, that’s simultaneously hilarious and terrifying
"Either I'm an idiot, or something is going on that you don't understand. Let's check back in a month. :)"
https://www.reddit.com/r/Wordpress/comments/1glejno/comment/...
...1 month later...
https://www.courtlistener.com/docket/69221176/64/wpengine-in...
I think this is a bit unfair.
Who among us can really say they haven't gone off the deep end, burned every drop of good will that ever existed towards them and their projects, sued a competitor and got hilariously burned by the judge, all while burning hundreds of millions of your companies value (blackrock marked them down 10%, which is 750 million)
This is just a normal thing that happens. It could have happened to anyone.
on the positive side, it's a small thing monetarily, but retention of company laptops is a nice goodwill gesture
Many of them are fully depreciated and worth nothing, or nearly so, on paper anyway. Any new employees won't want an old laptop. And it will cost time and money to deal with shipping, storage, cleaning, re-imaging, etc. On average, the bean counters must figure it's cheaper to let people keep them.
Eh, from the company's perspective this is logistically easiest--the laptop's value is hardly worth the effort.
a lot of companies ask for equipment to be returned due to security concerns, or just on principle
A company which is even moderately "OK" at IT will already have the means to instantly lock and securely wipe devices of any employee at a moments notice. Doing this during a RIF is a hell of a lot better than making the mail room deal with a bunch of filthy laptops.
One former employer had this policy, and also refused to provide a way to ship said equipment back. No one was happy with my alternative solution: leaving it at the police station instead.
“Welcome to your new job at HighSpeed TopFlight. Here’s an old, used laptop.”
And yet only one company I've ever worked for went this way.
I wish more did; it really is such a small goodwill gesture to departing employees.
It's a huge "depends". Different areas have different recycling opportunities. Some hardware providers have their own buyback/replacement programs. Also some companies may want to reimage and reuse the returned hardware. Finally you want some stock of temporary laptops available for people who are waiting for repairs so some functioning used ones are great for that.
Yeah at the BigCorps I was at, old laptops (as long as they weren’t more than 3-4 years old) were usually reimaged and kept on hand as spares or for interns, etc. But I imagine after a large layoff they ended up with way more than they’d ever actually need.
This comment thread is just hilarious. When a CEO of a VC-backed startup that you admire does things you disagree with, you find ways to justify their actions. When a CEO that is running an actually successful business and wishes to defend that business legally, you trash him. Be better.
Matt needs to be better, you're hilarious - he is the common denominator
>A comprehensive package covering severance pay and benefits.
What does this mean in term of monthly wages?
I was a technical lead for the Romanian branch of an US company. They fired me along with my team and other teams. The reason was they were profitable but they missed the ARR by a million or something. Last year they did the first firing round, this the second.
When they announced they will fire us, they also announced they will hire more sales people. The ratio of business people/tech people was already 7:1 before that. They also said a programmer should produce 5 times the money the company spent with him, and we were at 4 point something.
Now I have found a position at a local company which takes care of its people even in harder times.
Judgement aside, I've gotta respect the humane way this org does layoffs. There's some slags in here about founder being "sociopath", but I'm just seeing a really humane founder with maybe some control issues.
Trump, who betrays everyone for personal benefit, there's a sociopath. Mullenwag's just got some personality vices that served him as underdog, and didn't adapt to when he gained power
From an alternate universe:
I apologize for my erratic behavior which has tarnished our brand and created unnecessary turmoil within our organization. Regrettably, we will need to implement a 16% reduction in headcount to address the financial challenges we now face. I have decided to step aside and hand over control to my deputy, who I believe will provide the steady leadership needed to rebuild trust and restore our company's vision.