Atlassian, the Australia-based project management software developer, recently announced that it would cut around 5% of its global workforce following last month’s reorganization. This means that a total of 500 full-time employees will be affected.
Atlassian produces software that helps businesses manage their workforce. The company’s flagship products are JIRA, Confluence, and Trello.
The company gave its employees an organization-wide update that an email would notify them about their future in Atlassian.Â
Company Clarifies Layoffs Are Part of Its Rebalancing Efforts
Given that the company was reporting net losses despite increasing revenues over the years, the common assumption may be that the layoffs resulted from its economic performance. However, the company clarified that this was not the reason.Â
The announcement from Mike Cannon-Brookes and Scott Farquhar, co-founders and co-CEOs of Atlassian, emphasizes that this change shouldn’t be interpreted as an indication of the business’s financial performance. Instead, the co-founders are positioning this move as a “rebalancing†that will help the company prioritize the areas where it is growing.
Cannon-Brookes and Farquhar said they have already changed how the business operates, but these did not go far enough.
“A month back we reorganised our company to better reflect operating in a changing and difficult macroeconomic environment,†they wroteOpens a new window . “We made tough calls to prioritise the most critical work for our current and future customers. While it helped us streamline work, we need to go further in rebalancing the skills we require to run faster at our company priorities.â€
See More: Tech Layoffs: Could 2023 Signal a Turnaround for the Tech Sector?
All Atlassian teams are experiencing layoffs, with talent acquisition, program management, research, and insights the most impacted. “We’ve made hard calls to reduce our investment in specific areas, to reinvest in others,†the Atlassian co-founders said. “As a company, we have massive growth opportunities in front of us. Although hard, this rebalancing will help us put more wood behind these arrows.â€
Atlassian Promises To Provide Severance Pay and Additional Benefits
As per the SEC filingOpens a new window , “The Company estimates it will incur approximately $70 million to $75 million in charges in connection with these actions, of which roughly $27 million to $29 million is expected to result in future cash outlays related to severance, notice period, employee transition and benefits payments, and approximately $43 million to $46 million is expected to consist of non-cash charges for accelerated vesting of share-based awards and exit charges associated with office space reductions.
According to the company, most of these charges should be paid in the third quarter of the fiscal year 2023, and execution of these steps, including cash payments, should be nearly finished by the end of the fourth quarter.
Although layoffs are never pleasant, the company plans to provide impacted workers with 15 weeks of severance pay, plus an additional week for each year of service and payment for any unused paid time off. Atlassian will provide accelerated vesting, employer-sponsored health insurance, and visa assistance for the following six months. Also, employees will be permitted to keep their laptops for work (which is becoming increasingly common).
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