Tumblr is a commercial website based on growth like any other social media. If things were really just "we're struggling to keep the lights on" they'd do what community sites used to do and have donation goals. They could be informing the users of server and dev expenses and allowing the community to support the site as needed. But it's not a community website, even though the community is here.
They complain about how expensive the site is to keep up, but drawing in larger crowds doesn't fix that, it adds to the expense. The only reason to focus on drawing larger crowds like they're trying is to monetize them. We all laugh about how well they know their users by letting us pay for jokes, by letting us pay to force pics of our cats onto other people's dash, and that stuff is fun and frankly, in a more transparent, community-oriented website, that would be fantastic as a way to help pay the bills. But that stuff isn't going to sell to the average twitterer they're trying to recruit. Twitter people aren't gonna buy tumblr shoelaces (hell, how many tumblr users even buy the shoelaces?). To monetize the new users they want to draw in, they're going to have to make changes for the worse. They're gonna have to switch to algorithms, more sponsored content, and more algorithmic moderation.
"But the top people at tumblr are all veteran tumblr users. They understand us!" There are still nazis and terfs all around tumblr. My first experience talking to ancaps was on tumblr. Your next door neighbor might have lived there as long as you but that doesn't mean he can't have some wildly shitty oppinions. tumblr staff and administration can be just as disconnected from general tumblr culture as any of the shitty people who send death threats to trans people on here, hell, there's no way for us to know if the person sending anon hate is the same person forcing community labels on non-revealing transition pictures.
I love tumblr, but I love it for its community. You guys are tumblr, not this dumpster fire of a website being run by (at best) slightly woke corporate-minded profiteers. Don't be loyal to a website, be loyal to your friends, your mutuals, and the wonderful community we have here. If tumblr the website wants to be the gayest place on the web, then it needs to focus on being a part of the community, working with the community, and takimg care of the community.
Don't buy merch from a website that's flagging trans people for existing. Don't give money to a website that's sacrificing its user base to draw in different crowds because they're bigger. Demand transparency. Demand accountability. Demand community.