We run a blog+community website and it's earned lot of reputation because of its usefulness and original content. Our blog (Wordpress powered) regularly appears in Google news and we've several authors who publish news round the clock, and every post is edited by dedicated editors.
I noticed that our blog authors had added lot of tags that were linked to either one or zero posts. I decided to delete them in one go (big mistake, I think) and deleted them. I did not set 301 redirects; and all the deleted tag pages now show 404s.
On 5th September, I noticed sudden decrease (40%) in our traffic to the 'community forums' (while the blog traffic decreased only by 10%) . GWT currently reports over 58k 404 errors on the site. My question is :-
1. Can removal of large number of tags from our blog affect the traffic to our overall site (mostly to the community)?
2. What is the best way to recover? I'm not sure if setting up 301 to blog homepage is right thing to do?
3. The site has survived Panda and Penguin updates because we've always focused on original content and never involved in any link-building or SEO strategies. Is there anything I should be looking at?