WordPress parent Automattic lays off 16% of its employees amid legal and market challenges

Automattic, the company behind WordPress.com, has laid off around 16 percent of its staff in a bid to safeguard its future amid ongoing legal battles and intensifying market competition. The move affects roughly 280 employees, bringing its total workforce down from 1,777 to 1,495, according to a memo by CEO Matt Mullenweg.

“We have reached an important crossroads,” Mullenweg wrote in the company-wide note. “While our revenue continues to grow, Automattic operates in a highly competitive market, and technology is evolving at unprecedented levels. To support our customers and products, we must improve our productivity, profitability, and capacity to invest.”

The layoffs come just months after Mullenweg offered buyouts to staff who disagreed with his decision to initiate a public confrontation with WP Engine, a third-party WordPress hosting service. At the time, employees were offered either $30,000 or six months’ salary to voluntarily leave. That round saw the company lose 8.4 percent of its workforce.

Automattic is currently locked in a heated legal dispute with WP Engine, which accused the company of unfairly blocking its access to WordPress.org’s server and taking control of its popular Advanced Custom Fields (ACF) plugin. Mullenweg has been frank about the stakes, saying the litigation “could potentially bankrupt me or force the closure of WordPress.org.”

The lawsuit not only threatens Automattic’s legal standing but has also sparked concerns about the governance and neutrality of WordPress.org, one of the most widely used platforms on the internet.

The latest round of layoffs suggests a more cautious posture as the company contends with escalating legal costs and an industry-wide pivot towards leaner operations. While Automattic has long promoted a flexible, remote-first work culture and open-source philosophy, the company now appears to be focusing on tightening operations and boosting profitability.

The move mirrors a broader trend in the tech industry, with many companies reducing headcount to remain competitive while navigating economic uncertainty and rapid technological shifts, particularly in AI and cloud infrastructure.