According to a leaked memo, Tumblr’s longterm financial woes have reached a breaking point. Aside from a skeleton crew of essential workers in departments like trust and safety, the majority of Tumblr’s 139 workers will be reassigned to other products at parent company Automattic, which employs around 1,900 people. CEO Matt Mullenweg acknowledged the memo on his own Tumblr blog, where he is responding to questions from the site’s users.
In response to a question about whether or not Tumblr will shut down, Mullenweg wrote:
“What’s super clear is our previous approach wasn’t working. It didn’t turn around the business to make enough money to support the investment of infrastructure and staff needed to run Tumblr, and a lot of users were unhappy with some of the changes we tried. There have been a few staff changes within the team, but basically what we’re saying is starting January 1, 2024 we’ll try a different structure with smaller, more focused teams working on the core parts of Tumblr that people say they want improved. We’ll sunset or rollback some things we tried that didn’t work.”
Tumblr’s woes aren’t a surprise. The blogging platform saw a brief resurgence in popularity, as disgruntled Twitter users searched for a new home in the wake of Elon Musk’s acquisition. But Mullenweg revealed in July that Tumblr is losing about $30 million per year.
Tumblr faces the same challenges as any social platform, but it has the unique tension of catering to a base of fiercely protective fans who balk at most attempts at monetization. Tumblr users will pay to send crabs to their friends, or to buy joke blue checks to poke fun at Twitter, but when the site tried launching a subscription feature, it went about as badly as a product launch could possibly go.
Tumblr was founded in 2007, then acquired by Yahoo (TechCrunch’s parent company) for $1 billion in 2013. By 2019, WordPress.com parent Automattic bought Tumblr for just $3 million. Though it has a loyal base of power users and is beloved in fandom spaces, Tumblr has also struggled to grow its daily active users, especially after its infamous porn ban.
This story is developing…
