Atlassian to dump 500 – by email – in the name of 'rebalancing'

Collaboration upstart previously said it would 'moderate' hiring and use layoffs elsewhere to boost its talent pool

Atlassian has announced a five percent reduction in its workforce as part of an effort it founders described as a "rebalancing" that will allow the collaboration upstart to focus on its changing priorities.

"Today marks a very hard day in our 20-year history," wrote co-founders Mike Cannon-Brookes and Scott Farquharson. "We have made the difficult decision to rebalance our team to better position Atlassian for the long term, meaning we will be saying goodbye to around 500 Atlassians, or 5% of our employees."

A version of that post in a regulatory filing [PDF] adds: "Every Atlassian will receive an email within the next 15 minutes detailing if they are impacted."

The post explains that the round of redundancies is not needed on financial grounds and is not aimed at reducing costs. Rather it is recognition that recent "tough calls" to prioritize "the most critical work for our current and future customers" did not go far enough.

"We need to go further in rebalancing the skills we require to run faster at our company priorities," Cannon-Brookes and Farquharson wrote. The Aussie upstart will therefore be "reinvesting in roles that better support our priorities."

The co-founders revealed that Atlassian's "Talent Acquisition, Program Management, and Research & Insights" teams will feel the deepest cuts.

The decision to shed staff is a significant and swift change from the position Cannon-Brookes and Farquharson offered in their Q2 FY 2023 shareholder letter [PDF] issued on February 3. In that document, the pair wrote: "We continue to expect operating expense growth to decelerate in H2 as we follow through on our previously announced plans from last quarter to reduce discretionary non-headcount related spending and moderate the pace of headcount growth."

Losing 500 staff is more than moderation.

Atlassian previously flagged its intention to keep hiring – carefully – in November 2022, when Farquharson told investors layoffs at other companies represented an opportunity.

"There's a lot of incredible people in the market who may only come on the market once a decade and we have an opportunity to pick those staff up now," he said at the time, adding that Atlassian planned to "be really thoughtful around how many we hire and where we hire, but our experience is that we can come out really strongly on the other side by selectively picking up staff that other people are letting go."

Farquharson made those remarks after reporting Q1 FY 2023 results that included the addition of 989 staff in the quarter.

Those made redundant will be offered 15 weeks of pay, plus an additional week for each year of service. They'll also get to keep their company laptops once they've been remotely wiped. Staff whose machines can access sensitive information will find they've already been locked.

Atlassian advised the sackings will cost it between $70 and $75 million. ®

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