Atlassian is cutting 5% of its workforce

Atlassianthe company behind tools like Jira, Confluence, and Trello announced that, after a reorganization a month ago, it is now laying off about 500 employees. That is about 5% of the total workforce.

Atlassian co-founders and co-CEOs Mike Cannon-Brookes and Scott Farquhar note in today’s announcement that this move should not be viewed as a reflection of the company’s financial performance (although it is worth noting that despite the increase in total sales in recent years, It continues to report net losses in the quarterly figures). Instead, the co-founders are positioning this move as a “rebalancing” that will help the company prioritize the areas where it is growing.

“We have made strong calls to reduce our investments in specific areas, to reinvest in others,” the co-founders write. “This is different from a financially driven cut, where you would try to make ‘broad cuts’ – say, a 10% cut spread equally across every organization within the company. This is not what is happening here.”

Notably, Atlassian will be cutting employees in areas such as talent acquisition, program management and what it calls “research and insights.”

In the concise language of the company SEC filing, the idea here is to “better position it to perform against its biggest growth opportunities.” According to the co-founders, these opportunities include cloud migrations, IT service management (ITSM), and “serving our enterprise customers in the cloud.” It’s no secret that Atlassian has focused on its cloud services in recent years and it looks like it’s doubling down on that, as well as products like Jira service managementthe ITSM solution it launched in 2021.

According to Atlassian’s filing, the company will incur approximately $70 to $75 million in costs related to these layoffs.

While layoffs are never easy, the company offers affected employees 15 weeks of severance pay, plus one additional week per year of service, with any unused paid time off also paid. Atlassian will offer accelerated hiring and employer-sponsored health care, as well as visa support, for the next six months. Employees can also keep their work laptops (which is becoming more common).

In what’s a bit unusual, laid-off employees will continue to have access to the company’s communications tools for the rest of this week — though users with access to sensitive data will be allowed access to their laptops (although they’ll still be able to access tools such as Confluence, Slack, Zoom and Gmail on other previously enrolled devices).