The global “tech wreck” has found its way to Australia, with Atlassian set to shed 5 per cent of its workforce.
The lay-offs follow 12,000 jobs being cut at Google parent company Alphabet; 11,000 at Facebook parent company Meta; 10,000 at Microsoft, 18,000 at Amazon; 8,000 at Salesforce; 4,000 at Cisco; and more than 3,000 at Twitter.
In a staff memo filed with the SEC, co-founders Mike Cannon-Brookes and Scott Farquhar said: “We came to this decision as an executive team and with our board, but ultimately the final call is on us as co-founders. To those who are leaving us: we are deeply sorry.”
The pair added that Atlassian had undergone a reorganisation to “better reflect operating in a changing and difficult macroeconomic environment”.
“We made tough calls to prioritise the most critical work for our current and future customers. While it helped us streamline work, we need to go further in rebalancing the skills we require to run faster at our company priorities,” the founders said in the note.
“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. As a company, we have massive growth opportunities in front of us, particularly across cloud migrations, ITSM, and serving our enterprise customers in the cloud. Although hard, this rebalancing will help us put more wood behind these arrows.”
Reflecting on the recent lay-offs in the tech sector, AMP chief economist Shane Oliver told InvestorDaily that the pandemic and subsequent lockdowns led to a tech sector boom as demand exploded for a wide range of tech services, from streaming to Zoom, and technology to support remote work and collaboration. As a result, share prices and revenue surged.
“Now with reopening and partial return to work, demand for tech hardware and services is slowing or in some areas in retreat, so they have seen revenue growth slow or in some cases, revenue is falling — in contrast to what many tech companies had been assuming. The rise in bond yields and tightening in financial conditions has also made it harder for tech companies to raise capital,” Dr Oliver said.
“This has all been reflected in tech share prices falling but it has meant that they have had to respond by announcing lay-offs.”
In hindsight, Dr Oliver said tech companies expanded their workforces “too much” in a boom that is now reversing.
Atlassian is currently building a new headquarters near Sydney’s Central Station, which it has called the world’s tallest hybrid-timber tower. The project is due to be completed in 2026.
