Atlassian Joins Mass Tech Layoffs With 500 Employees Cut

All affected employees will have a chance to apply for open roles at Atlassian, according to a blog post.

Atlassian, the project management software vendor behind tools Jira, Confluence and Trello, is the latest tech company to announce layoffs with cuts to about 500 full-time employees, 5 percent of the workforce.

However, all affected employees will have a chance to apply for open roles at the Australia-based vendor, according to a blog post announcing the layoffs and signed by co-founders and co-CEOs Mike Cannon-Brookes and Scott Farquhar.

The blog post called the layoffs “a very hard day in our 20-year history.” The cuts, however, are “not a reflection of Atlassian’s own financial performance, as we will be reinvesting in roles that better support our priorities,” according to the post.

“As a company, we have massive growth opportunities in front of us, particularly across cloud migrations, ITSM (IT service management), and serving our enterprise customers in the cloud,” according to the post. “Although hard, this rebalancing will help us put more wood behind these arrows.”

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Atlassian Layoffs Hit Program Management

CRN has reached out to Atlassian for comment on whether the cuts reach the vendors’ partner program, which includes solution partners and system integrators.

Atlassian said in the post that the cuts will mostly affect the talent acquisition, program management and research and insight teams.

The vendor will “invest in strategic areas of the business, aligning talent to best meet customer needs and business priorities, and optimizing for operational efficiency,” according to a regulatory filing with the United States Securities and Exchange Commission.

Atlassian expects to pay about $70 million to $75 million in charges related to the layoffs, according to the filing.

Between $27 million and $29 million of those charges are cash for severance, employee transition, benefits and similar costs. The rest is for accelerated vesting of share-based awards and exit charges for reducing office space. Atlassian should complete a substantial amount of the payments by the fourth quarter of the 2023 fiscal year.

During the vendor’s latest quarterly earnings report, Atlassian reported $873 million in revenue for the second quarter of its fiscal year – a quarter ended Dec. 31. That revenue is 27 percent up years over year. The company surpassed 45,000 Jira Service Management customers during the quarter.

The company reported an operating loss of $99.2 million for the quarter. For the same period a year ago, the company saw operating income of $23 million. Net loss was $205 million for the quarter, almost ten times the net loss for the second quarter of the 2022 fiscal year.

Although Atlassian’s co-CEOs said the company’s financial performance is not the reason for the layoffs, they come as multiple tech vendors navigate more IT budget scrutiny from cost-conscious customers and moderated buying of digital tools after a bump during the height of the global pandemic.

Recent vendors to announce layoffs include Zscaler, GitLab, Thoughtworks, Ericsson, DigitalOcean, Rigetti, Microsoft’s GitHub and Twilio.