This AI mass job losses story is from David Swan at the Sydney Morning Herald.
“Billionaire chief executive Mike Cannon-Brookes fired 10 per cent of Atlassian’s total headcount over email on Thursday, axing around 1600 workers and prompting anger among its workforce as the company is upended by AI turbulence.
Cannon-Brookes told staff on Thursday morning that AI was changing “the mix of skills we need” and “the number of roles required in certain areas” in the largest restructure in the company’s 23-year history.
A spokeswoman said about 30 per cent of the impacted employees are based in Australia, meaning about 500 local jobs will be axed. Atlassian employs about 16,000 workers globally with about 3500 of those in Australia.
Impacted staff were notified by email within 20 minutes of Cannon-Brookes making the announcement. In a video message recorded for staff, the chief executive described the decision as among the hardest he had faced as a leader.
“Days like these are among the toughest that we have as a company, and certainly the toughest that I have as a leader,” he said. “I am deeply sorry for the disruption this creates in your life.”
The cuts cap a torrid year for Atlassian, whose share price is down 66 per cent over the past 12 months to $US75.45 ($105). Its share price is up 1.5 per cent in after-hours trading in New York.
Cannon-Brookes said more than 100 Atlassian staff worked to determine which roles would be cut with priority given to retaining staff with AI-relevant and transferable skills. Affected staff will receive a minimum 16-week separation package plus one additional week per year of service, extended healthcare cover for six months, and a $1000 technology payment to replace their corporate laptop.
Cannon-Brookes, whose co-CEO Scott Farquhar resigned in April 2024, framed the cuts as offensive rather than defensive.
“The bar for what ‘great’ looks like for software companies – on growth, on profitability, on speed, on value creation – has gone up,” he wrote in a letter to staff. He said the cuts were the product of a “thoughtful and incredibly thorough” process.
“We fundamentally believe people and AI create the best outcomes,” he wrote. “Our approach is not ‘AI replaces people’.”
Internally, the manner in which roles were selected has prompted frustration. One employee, who asked not to be identified, told this masthead there was “zero visibility on who is specifically cut aside from searching individual people’s names”. The process appeared inconsistent.
“A senior in my team who had exceeded expectations in the last performance review, as well as being in the team for five years, has been let go, whereas there are newly joined team members with less than three months tenure who have not been affected,” the employee said. They added that the company may have been reluctant to cut recently hired staff due to the money invested in recruiting those staff or reputational concerns.
“I personally think we overhired,” the employee said, “and [Cannon-Brookes is] hoping the stock price goes up as a result”.
Atlassian makes collaboration software products including Jira, Confluence and Trello, which are used by hundreds of thousands of organisations worldwide. In November, it dramatically expanded its Melbourne presence.
Atlassian said in a regulatory filing that it would incur between $US225 million and $US236 million in charges relating to the lay-offs.
The restructure comes against a backdrop of persistent financial underperformance that has long troubled investors. Despite generating substantial revenue – and reporting 23 per cent revenue growth in its most recent quarter – Atlassian has not recorded a net profit in a decade. The company’s net loss widened from $US38.2 million to $US42.6 million in its most recent quarter.
The company also announced on Thursday that chief technology officer Rajeev Rajan, a former Meta executive who had introduced tougher performance metrics for developers, would step down after nearly four years. He will be replaced by two internal promotions: Taroon Mandhana as chief technology officer of teamwork, and Vikram Rao as chief technology officer of enterprise and chief trust officer. The company described both as “next-generation AI talent”.
Beyond Thursday’s job cuts, Atlassian had been attempting to get on the front foot as AI capabilities have advanced, building its own AI tool, Rovo, and spending $US1 billion on developer intelligence platform DX and $US610 million on AI-based The Browser Company, both acquired last year.
Cannon-Brookes told staff that a company-wide town hall would be held next week to address further questions. “Please be kind to yourselves and to each other,” he said. “Check in on your teammates and friends and give people everywhere the space to process.”
Afterpay’s parent company Block this month slashed more than 4000 jobs in the name of artificial intelligence, joining the likes of WiseTech Global, Amazon, Pinterest and Crowdstrike, which have all slashed roles.”