Atlassian cuts 5% of its workforce

Atlassian, the company behind tools such as Jira, Confluence and Trello, today announced that after a reorganization a month ago, it is now laying off around 500 employees. This represents approximately 5% of its total workforce.

Atlassian co-founders and co-CEOs Mike Cannon-Brookes and Scott Farquhar note in today’s announcement that this decision should not be viewed as a reflection of the company’s financial performance ( although it should be noted that despite increasing its overall revenue in recent years, it continues to report net losses in its quarterly earnings releases). Instead, the co-founders are positioning the move as a “rebalancing” that will help the company prioritize the areas in which it expands.

“We have made tough calls to reduce our investments in specific areas, in order to reinvest in others,” the co-founders write. “This is different from a reduction motivated by financial reasons, where you would seek to make “large scale reductions” – for example, a reduction of 10% distributed equally in all organizations of the company. That’s not what’s happening here. »

Specifically, Atlassian will cut employees in areas such as talent acquisition, program management, and what it calls “research and insights.”

In the terse language of the company’s SEC filing, the idea here is to “better position it to execute its biggest growth opportunities.” According to the co-founders, these opportunities are cloud migrations, IT service management (ITSM), and “serving our enterprise customers in the cloud.” It’s no secret that Atlassian has been focusing on its cloud services in recent years and it looks like it’s doubling down on that, as well as products like Jira Service Management, the ITSM solution it has launched in 2021.

According to Atlassian’s filing, the company will incur approximately $70 million to $75 million in costs related to these layoffs.

While layoffs are never easy, the company is offering affected employees 15 weeks of severance pay, plus an additional week per year of service, with unused vacation pay being paid as well. Atlassian will offer expedited vesting and employer-sponsored health care for the next six months, as well as visa assistance. Employees will also be able to keep their work laptops (which is becoming increasingly common).

In what is somewhat unusual, laid-off employees will retain access to company communication tools for the remainder of this week – although users with access to sensitive data will not see their laptops (although they can still access tools like Confluence, Slack, Zoom, and Gmail on other previously enrolled devices).