Is Tumblr About to Go Belly Up? Staff to Be Reassigned to ‘Revenue-Generating’ Divisions
A leaked internal memo revealed that Tumblr, the once-popular blogging platform, is undergoing significant changes due to long-standing financial challenges. CEO Matt Mullenweg confirmed the memo’s authenticity on his own Tumblr blog, acknowledging the need for a new approach to address the platform’s financial woes.
Mullenweg stated that the current business model failed to generate sufficient revenue to support Tumblr’s infrastructure and staff, leading to dissatisfaction among users with attempted changes.
To counter this, starting January 1, 2024, Tumblr will adopt a different structure, with smaller, more focused teams dedicated to improving core aspects of the platform based on user feedback. Some unsuccessful features will be sunset or rolled back.
Tumblr, founded in 2007 and initially acquired by Yahoo for $1 billion in 2013, faced challenges in growing its user base, exacerbated by a controversial ban on adult content in 2018. Despite a brief resurgence in popularity, recent revelations indicate Tumblr is losing around $30 million annually.
The leaked memo disclosed that a majority of Tumblr’s product and marketing staff will be reassigned to other divisions within parent company Automattic by the end of the year. Mullenweg explained that employees, who have “been performing really well in their work,” have known for over a year that they could be moved to revenue-generating divisions.
“We’ve also learned a ton working on Tumblr that I think will make our other products better,” he said.
Mullenweg also expressed confidence in setting up Tumblr for success in its next chapter and emphasized the commitment to maintaining the artistic and supportive aspects that make Tumblr unique. The CEO also hinted at the potential for a more streamlined and efficient Tumblr in 2024, with a focus on achieving growth with smaller, specialized teams.
“We are shifting from the mode of ‘surging’ on Tumblr with tons of people to get it to exciting growth, to working on how we can run Tumblr in the most smooth and efficient manner. Pretty amazing things in the social and messaging space have been accomplished with small teams, so I’m actually quite curious to see a smaller and more focused Tumblr’s performance in 2024.”
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