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Atlassian Announces Layoffs Due to Shifting Priorities

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After a company-wide reorganization a month ago, business software maker Atlassian said Monday that it will lay off 500 employees, or around 5% of its workforce. The cost cuts will result in $70 million to $75 million in charges, according to a financial filing.

Atlassian’s competitors, Alphabet, Asana, GitLab, IBM, Microsoft and PagerDuty, as well as other companies like Zscaler, have also announced job cuts in recent months as economic uncertainty continues.

In a blog post, Scott Farquhar and Mike Cannon-Brookes, Atlassian’s co-founders and co-CEOs, said the move is less about profitability and more about shifting focus to the company's key priorities such as IT service management and helping customers move workloads from on-premises data centers to the cloud. Cuts are not evenly distributed across the company, they wrote, but are mainly focused on talent acquisition, program management and research.

“While many teams across Atlassian are impacted, some of our most impacted teams include Talent Acquisition, Program Management, and Research & Insights,” Farquhar and Cannon-Brookes wrote in the blog post. “We want to be clear these decisions are not a reflection of our teammates’ work. Every single person has made contributions that have changed our company for the better and will leave a lasting impact on their peers and teams. This is about rebalancing the roles we need across Atlassian first and foremost.”

The company generated about $873 million in revenue in the fourth quarter of 2022, up about 27% year-over-year, although it ended the period with a $205 million net loss.

Employees whom Atlassian is cutting will receive 15 weeks of severance, plus one week for each year of employment, and they can keep their laptops. Friday, March 10, 2023, will be their last day, according to the company.