While the 500 layoffs at Atlassian come as a shock to many, it’s hardly the first time the company has had to make cuts. In fact, in January of this year, Atlassian laid off about 260 employees (about 4% of its workforce) as part of another round of cost-saving measures. So while this number may seem large, it’s actually quite normal for Atlassian – and other tech companies – when it comes to layoffs.
With their recent relocation to San Francisco, Atlassian has put emphasis on its Emerging Technology Group and put more distance between themselves and their product development teams in Sydney. The move is seen as a rebalancing of priorities that will help Atlassian focus more on areas where they are growing, such as emerging technology.
The co-founders of the company state that their decision to reduce investments in specific areas is not a result of a financially motivated reduction, but rather an effort to reinvest in other areas. This distinction is important because it demonstrates that the company is looking for ways to save money without compromising its overall operations.
Atlassian plans to reduce its workforce by 10% in research and insights, talent acquisition, and program management. This will affect a total of 350 employees. Atlassian’s VP of HR announced that the cuts will focus on areas where the company sees less value or less need for its employees. Atlassian believes that by focusing on these areas it can better allocate its resources and raise its competitive edge.
Atlassian’s focus on its cloud services and products could lend itself well to the growth of the “tech stack refresh” trend that is sweeping the industry. According to Gartner, a refresh or overhaul of a company’s technology stack is “a process in which an organisation replaces legacy systems and applications with modern versions that support its strategic goals.” This can be as simple as replacing old software with newer versions, overhauling entire systems, or building a completely new system from scratch. Whether it’s upgrading outdated software applications or switching to newer platforms altogether, refreshes can help companies improve agility and responsiveness by modernizing their technologies. Atlassian has made significant strides in developing innovative cloud services and products that could benefit from this trend – giving it an edge over its competitors when it comes to executing against larger growth opportunities.
Atlassian plans to incur $70-75 million in charges as a result of their layoffs, which amount to around fifteen percent of the company’s workforce. However, even with these layoffs, Atlassian still employs over 7500 people as of June 2019. This signifies that the company is still committed towards its workforce and will continue to grow despite these negative effects.
During these difficult times, Atlassian is doing its best to make sure that its employees are taken care of. By offering severance pay and other benefits, the company is showing its commitment to its employees. Additionally, the company is providing laptops for those who need them, which shows that it takes pride in their work situation.
This move is intended to give employees time to find new jobs, and allow them to keep up with work from home. However, data access will be restricted for users with access to sensitive information, in order to protect the company’s confidential information.