Automattic, a component of the Prime Unicorn Index, recently made headlines when CEO and WordPress co-creator Matt Mullenweg gave his employees a striking ultimatum, according to CIO. Automattic, the company behind WordPress and the anti-spam tool Akismet, develops software that powers much of the web. Amidst internal disagreements over his handling of a dispute with WP Engine, Mullenweg offered staff the option to leave the company — with an enticing buyout of six months’ salary or $30,000, whichever was higher.
The conflict stemmed from Mullenweg’s dissatisfaction with WP Engine’s contribution to maintaining and improving WordPress. He proposed that WP Engine either pay Automattic 8% of its revenue as a license fee for using the WordPress trademark or commit staff time equivalent to 8% of its revenue to work on WordPress core features. WP Engine responded by filing a lawsuit accusing Automattic of attempted extortion, further escalating tensions.
Internally, the disagreement caused a rift, with many Automattic employees disagreeing with Mullenweg’s approach. In a candid blog post, Mullenweg acknowledged that a “good chunk” of his colleagues didn’t see eye-to-eye with him. In response, he decided to offer them a way out with what he described as “the most generous buy-out package possible.”
Employees had until October 3rd to accept the offer, and by the deadline, 159 employees — representing 8.4% of the workforce — took the deal, including one who had only started two days earlier. Mullenweg, while reflecting on the resignations, expressed a mix of emotions, stating, “Every resignation stings a bit.” However, he also shared optimism about the future, noting how he felt “lighter” and excited to work with those who chose to stay.
Automattic’s official statement framed the departures as a “strategic realignment” and highlighted the loyalty of the 91.6% of employees who decided to remain. Mullenweg echoed this sentiment, expressing gratitude for those who turned down a collective $126 million to stay and continue working toward Automattic’s mission.
Automattic is valued at $3.2 billion in the Prime Unicorn Index and last raised a $300M Series D round in September 2019 from Salesforce Ventures, ICONIQ, Tiger Global, Insight Partners, Akkadian Ventures, and others. Form D filings from December 2019 and February 2021 show additional raises of $80.7 million and $288 million, respectively.
