As Tumblr fails to make a turnaround despite substantial investment, the company is facing a shift in the business focus as well as reduced staffing.

A leaked internal memo by Tumblr CEO Matt Mullenweg showed an outlined restructuring plan by moving a majority of the employees out of Tumblr to different teams within Automattic.

Mullenweg eventually confirmed the authenticity of the leaked memo and explained the current state of affairs within Tumblr and Automattic. In his revelation, it is revealed that Tumblr is struggling to meet the company’s targeted earnings despite the stimulus put into it.

Previously owned by Verizon as part of the acquisition of Yahoo worth $1.1 billion years earlier, Automattic procured Tumblr from Verizon for $3 million in 2019. While the company exec said that the price of the acquisition is right for Tumblr, he also revealed that the $100 million investment never bore fruit.

As a massive layoff is not an option, Mullenweg mentioned via a post that 139 of its employees on the product side of Tumblr are given the option to find suitable roles within Automattic. The Tumblr post corroborates the statement mentioned within the memo.

Tumblr, meanwhile, will be left under the presence of the company’s existing Customer Support and Trust and Safety teams.

Although Tumblr fails to meet expectations, the company will remain operational moving forward, albeit with significantly reduced employees to keep it going.

With its attention set for 2024, Automattic seems to be looking ahead with some degree of uncertainty.

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