Atlassian cuts 500 jobs as tech sector pain intensifies

Technology giant Atlassian has gone from spruiking an Australia-wide hiring drive, replete with a branded campervan, less than six months ago to announcing it would cut 500 jobs globally on Tuesday.

Atlassian confirmed that about 120 of the job cuts were based in Australia, the decision highlighting how quickly the company grew during the pandemic and an industry-wide trend of cutting costs amid a tougher economy.

The redundancies represent 5 per cent of the company’s workforce of more than 10,000 people.

Atlassian co-founders Mike Cannon-Brookes (left) and Scott Farquhar announced the cuts on Tuesday.Credit: AFR

In an internal note to staff on Tuesday that the company also released publicly, Atlassian’s billionaire co-founders, Mike Cannon-Brookes and Scott Farquhar, said the company’s talent acquisition, program management and research and insights teams would be most affected.

“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,” Cannon-Brookes and Farquhar wrote.

Atlassian, which makes workplace software that is industry-standard in the IT sector, is still growing quickly, reporting 27 per cent revenue growth last quarter to $US873 million ($1.3 billion). But it also recorded a net loss of $US205 million and told the market it was seeing slower growth in its cloud products, which are crucial to its future.

Shares in Atlassian are up about 40 per cent this calendar year to $US176, which is still down about 60 per cent from the highs of late 2021, when technology stock prices were inflated by lockdowns, low interest rates and government stimulus spending.

A host of major technology companies, including Google, Microsoft and several lesser-known productivity companies, have announced lay-offs recently as investors pull away from the sector, lowering share prices and putting a renewed focus on profits.

Atlassian had long seemed to defy the hiring downturn, with co-founder Scott Farquhar joining a travelling campervan on stops around the country to advertise its recruiting plans last October. It pledged to hire 1032 staff in research and development roles in Australia and New Zealand within 12 months.

Atlassian co-founder Scott Farquhar with the company’s campervan, which drew attention to its policy allowing staff to work ‘anywhere’.Credit: Alex Ellinghausen

“If you’ve been laid off by another company because they closed it and closed down or shed staff, come work for us, we’re looking for you,” Farquhar told the Daily Telegraph in October.

But the company is still adding staff in some areas. Atlassian has 700 open roles and the teams affected by Tuesday’s lay-offs largely do not overlap with the research and development roles it is seeking in the recruitment drive. The company would not publicly answer questions on the layoffs or hiring, beyond pointing to the founders’ note.

“We’ve made hard calls to reduce our investment in specific areas, in order to reinvest in others,” Cannon-Brookes and Farquhar wrote. “This is different to a financially driven reduction, where you would look to make ‘broad-based cuts’ – for example, a 10 per cent cut equally distributed across every org within the company. This is not what is happening here.”

Redundant Atlassian staff will be offered a package of benefits far exceeding legal requirements, with Cannon-Brookes and Farquhar paying tribute to departing staff.

“We are incredibly sorry for the impact this will have on you and your family,” they wrote to affected staff. “Thank you deeply for your contribution to Atlassian.”

The cuts will cost the $US45 billion ($66 billion) company up to $US75 million in one-off expenses, according to a US regulatory filing.

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