Workplace software giant Atlassian is cutting around 5% of its workforce – 500 staff – with co-CEOs Scott Farquhar and Mike Cannon-Brookes say they “are deeply sorry”.
The job losses comes just four months after Farquhar embarked on a high-profile national tour last October to recruit more than 1000 people for new R&D roles. In January last year, Atlassian said it was looking to hire 5000 people locally over the next few years.
The co-CEOs told staff today in an email that they reorganised the company last month “to better reflect operating in a changing and difficult macroeconomic environment” going to make “tough calls” on their priorities.
“While it helped us streamline work, we need to go further in rebalancing the skills we require to run faster at our company priorities,” they wrote.
“To be clear, this decision is not a reflection of Atlassian’s own financial performance, as we will be reinvesting in roles that better support our priorities. As a company, we have massive growth opportunities in front of us.”
They said the “rebalancing will help us put more wood behind these arrows”.
The Nasdaq-listed software firm’s December quarter results, released last month, saw it post a US$99.2 million loss.
The net loss was US$205 million for the quarter, compared with a net loss of $22.3 million 12 months ago earlier.
In their shareholder letter for the quarter, Cannon-Brookes and Farquhar acknowledged “a challenging environment” with “macro-induced headwinds” that are slowing growth as other companies laid off workers, reducing demand for Atlassian products.
“We’re rebalancing our talent and resources to put increased focus on our largest growth opportunities: cloud migrations, the IT service management market, and serving enterprise customers. Atlassian is well positioned in these areas with significant momentum that can help us power through the turbulence ahead,” they said in the shareholder letter.
Now in its 21st year of operations, Atlassian has yet to post a full-year profit.
Not financially driven
Today the pair told staff they’d “made hard calls to reduce our investment in specific areas” to reinvest in others.
“This is different to a financially-driven reduction, where you would look to make ‘broad-based cuts’ – for example, a 10% cut equally distributed across every org within the company. This is not what is happening here,” they wrote.
Hardest hit by the job cuts are talent acquisition, program management, and research & insights.
“We want to be clear these decisions are not a reflection of our teammates’ work,” they said.
“This is about rebalancing the roles we need across Atlassian first and foremost.”
Those jobs will end this Friday, March 10, with the billionaires saying it “didn’t feel right to us” to immediately shut down communications for those leaving.
The company will also pay 15 weeks, plus 1 week for each year of service as its global severance package, and let them keep their laptops, alongside the now standard tech offering of bringing forward quarterly vesting, and healthcare and visa support.
“We are incredibly sorry for the impact this will have on you and your family. Thank you deeply for your contribution to Atlassian,” Cannon-Brookes and Farquhar wrote.
“We hope you walk into this next phase knowing you’ve had a positive impact here – and have changed our company for the better. We will do everything we can to help ease this transition.”
Atlassian ended 2022 with more than 10,000 staff globally.
In a filing to the US Securities & Exchange Commission, Atlassian said the redundancies will cost the business around US $70-75 million (A$105-112m) including US$27-29 million in severance and benefits payments, plus $43-46 million in non-cash charges for accelerated vesting of share-based awards and exit charges associated with office space reductions.
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