Restructuring Announcement

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.

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.

The issue was interest rates. Money was free in Feb 2022; the interest rate was literally 0%, and so any cash-generating investment at all is profitable. Fed started raising rates in Apr 2022, at which point leaders started freaking out because they know what higher rates mean, and by Jun 2022 the Fed was raising them in 0.75% increments, which was unheard of in modern economics. By Jan 2023 the rate was 4.5%, which meant that every investment that generates an internal rate of return between 0% and 4.5% is unprofitable. That is the vast majority of investment in today's economy. (We also haven't yet seen this hit fully - a large number of stocks have earnings yields that are lower than what you can get on a savings account, which implies that holding these stocks over cash is unprofitable unless you expect their earnings to grow faster than the interest rate drops, which doesn't seem all that likely in today's environment.)

https://fred.stlouisfed.org/series/FEDFUNDS

Now, you'd have a point if you complained about how centralization of government and economic power with the President and Fed chair, respectively, is a problem. That is the root cause that allows the economy to change faster than any leader can adapt. There used to be a time when people would complain about centralization of executive power on HN, but for some reason that moment seems to have passed.

AI is eating the world.

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."