The world of WordPress, the free and open-source software powering millions of websites, is in a state of chaos. This follows a public spat between Automattic, the company behind the popular WordPress.com hosting service and co-founded by WordPress originator Matt Mullenweg, and WP Engine, a major commercial WordPress hosting provider.

This escalating conflict has resulted in a significant internal shakeup at Automattic. CEO Mullenweg revealed that 159 employees, roughly 8.4% of the company’s workforce, accepted a severance package offered to those who disagreed with his leadership on the WordPress project and his handling of the feud with WP Engine.

Mullenweg, in a blog post attempting to spin the news positively, described the package as an “Alignment Offer,” a generous severance program of $30,000 or six months’ salary, whichever is higher. However, those departing would be ineligible for re-employment at Automattic.

The exodus primarily affected the company’s Ecosystem/WordPress division, responsible for the core WordPress platform. Departures also occurred within Automattic’s Cosmos businesses, which include popular apps like Pocket Casts, Day One, and Tumblr.

Mullenweg, while acknowledging the emotional impact of the departures, highlighted the 91.6% of employees who chose to stay. He framed this as a positive sign of loyalty and support for his vision.

However, the picture isn’t entirely rosy. Notable departures include the head of WordPress.com, Daniel Bachhuber, the head of programs and contributor experience Naoko Takano, and the Principal architect for AI, Daniel Walmsley. These losses raise questions about the potential long-term impact on Automattic’s core WordPress business.

At the heart of the conflict lies Mullenweg’s aggressive stance towards WP Engine. He accused them of “misusing” the WordPress and WooCommerce trademarks and barred them from accessing resources on the open-source WordPress.org platform. This move effectively disrupted WP Engine’s ability to service their WordPress-hosted websites.

Both companies have exchanged cease-and-desist letters (PDF version), and the situation escalated further when WP Engine filed a lawsuit against Automattic and Mullenweg on Thursday. They accuse Automattic of “abuse of power” and extortion, and allege that Mullenweg has conflicts of interest due to his dual roles as CEO of Automattic and a leader in the open-source WordPress project.

Automattic has dismissed all accusations as baseless. Their legal representative, Neal Katyal, stated, “We look forward to the federal court’s consideration of their lawsuit.”

Social media chatter amongst current and former employees paints a complex picture. While some Automattic staff chose to remain and publicly support Mullenweg on platforms like X (formerly Twitter), online leaks hinted at employee discontent with the severance offer and Mullenweg’s communication style. Allegedly, Mullenweg even sent a private message to a former employee critical of the situation, accusing them of attacking the company.