In the tech world, how you handle difficult moments defines your company more than your successes ever will. Recently, Atlassian—maker of popular workplace tools like Jira and Trello—gave us a masterclass in what not to do when reducing your workforce.
Co-CEO Mike Cannon-Brookes delivered news of 150 job cuts via pre-recorded video messages, bluntly informing employees they were being replaced by AI. This followed a larger round of 500 layoffs (5% of staff) in 2023. While the numbers themselves aren’t shocking in today’s tech landscape, the execution reveals deeper issues that should concern any leader who values culture.
When Leaders Hide Behind Screens
Atlassian’s decision to deliver life-changing news through pre-recorded videos wasn’t just a communications misstep—it was a fundamental betrayal of the human contract between employer and employee.
Think about it: You dedicate years to a company, pouring your creativity and energy into building their products. Then one day, you’re eliminated through what amounts to a corporate TikTok. No chance for questions. No opportunity for genuine conversation. Just a one-way message informing you that an algorithm can now do your job better than you can.
“When you fire someone via video, you’re not just terminating their employment—you’re terminating their dignity,” notes workplace psychologist Dr. Melissa Hammond. “The medium itself communicates that the conversation isn’t worth a leader’s time.”
The message sent to remaining team members couldn’t be clearer: You too are disposable. Your relationship with this company is transactional, not personal. And when the time comes, your leaders won’t even look you in the eye.
Business Is Relationships With Purpose
At The Culture Guy, we’ve always maintained that business isn’t just spreadsheets and product roadmaps—it’s a web of human relationships unified by common purpose. Strip away the humanity, and what remains isn’t worth building.
The 150 employees cut by Atlassian weren’t just line items on an expense report. They were people who chose to invest their professional lives in building Atlassian’s success. Their institutional knowledge, their understanding of customer needs, their relationships with colleagues—all of this represents value that doesn’t appear on a balance sheet but absolutely impacts the bottom line.
Even more concerning is what happens to those who remain. Research from Stockholm University shows that survivors of poorly executed layoffs experience:
- 41% decrease in job satisfaction
- 36% reduction in organizational commitment
- 20% decline in performance
By handling layoffs without compassion, Atlassian may have “saved” 150 salaries but potentially damaged the productivity and loyalty of thousands. The math simply doesn’t add up.
Making Others Pay for Your Mistakes
Let’s be brutally honest: when a company conducts layoffs, they’re asking employees to shoulder the consequences of leadership decisions.
Atlassian’s revenue grew 25% year-over-year in 2023, yet they reported a net loss, leading to their first major round of cuts. In 2025, they’re cutting roles specifically to make way for AI implementation. Both scenarios reflect strategic choices made in boardrooms, not performance issues with the individuals losing their livelihoods.
“Leadership means taking responsibility, not just authority,” says organizational psychologist Adam Grant. “When leaders fail to acknowledge their role in creating conditions that necessitate layoffs, they damage trust beyond repair.”
This dynamic creates a troubling power imbalance: executives make decisions about AI investment or market expansion, but when those bets don’t pay off as quickly as shareholders demand, it’s the rank-and-file employees who pay the price through job loss. Meanwhile, those same executives rarely face proportional consequences for the strategies that necessitated cuts in the first place.
The Lazy Leader’s Layoff Playbook
Perhaps most frustrating is how quickly some organizations reach for the layoff lever without exhausting other options first. True leadership requires creativity and courage—qualities conspicuously absent when the solution to every challenge is “reduce headcount.”
Before conducting layoffs, responsible leaders should consider:
- Executive compensation adjustments: Has leadership taken meaningful pay cuts?
- Operational efficiency improvements: Are there non-personnel expenses that could be eliminated?
- Retraining opportunities: Could affected employees be redeployed to growth areas?
- Voluntary reduction programs: Have you offered sabbaticals or part-time options?
- Transparent financial participation: Have you shared the challenges openly and invited solutions?
At companies like Patagonia and REI, leaders have historically taken substantial pay cuts before considering staff reductions. Meanwhile, Barry-Wehmiller CEO Bob Chapman famously implemented shared sacrifice programs during the 2008 recession—everyone took temporary pay cuts or unpaid vacation rather than letting anyone go.
Reaching for layoffs first isn’t just callous—it’s intellectually lazy. It represents a failure of imagination and moral courage.
No Surprises: The Foundation of Trust
Perhaps the most damaging aspect of Atlassian’s approach was its suddenness. According to accounts from affected employees, many had no indication their roles were at risk until the video announcement arrived.
Healthy organizational cultures are built on transparency. If AI implementation was going to impact certain roles, why wasn’t this discussed openly months in advance? Why weren’t employees given opportunities to upskill for the changing landscape?
Trust is built gradually through consistent honesty, but it can be shattered instantly through betrayal. When employees feel blindsided, the psychological contract is broken not just with those who leave, but with everyone who remains.
The Human Cost Behind Corporate Decisions
Beyond the clinical analysis of Atlassian’s approach lies the human impact. One former engineer reported being terminated during his wife’s cancer treatment after being forced into an unfamiliar role without adequate support—a stark contradiction to the company’s public commitment to employee well-being.
Stories like these reveal the gap between corporate values statements and lived reality. They demonstrate how quickly “people-first” philosophies can evaporate when financial pressures mount.
Building a Better Way Forward
For leaders facing genuine business challenges, there is a more humane approach:
- Practice radical transparency: Share financial challenges early and often, creating shared understanding of the business reality.
- Involve the team in solutions: People accept difficult outcomes better when they’ve had input in the process.
- Exhaust all alternatives: Make layoffs the absolute last resort, not the first cost-cutting measure.
- Lead with empathy: If reductions become necessary, deliver the news personally, with compassion and appropriate support.
- Honor contributions: Acknowledge the value people have created, rather than treating them as expendable resources.
- Create soft landings: Provide generous severance, extended benefits, and career transition support.
The companies that emerge strongest from challenging times aren’t those who cut the deepest—they’re those who preserve the human relationships that create value in the first place.
The Real Bottom Line
Atlassian’s approach to layoffs reveals a troubling disconnect between their espoused values and their actions under pressure. By prioritizing short-term financial considerations over human relationships, they’ve potentially undermined the very culture that fueled their growth.
For leaders everywhere, this serves as a powerful reminder: how you handle your most difficult decisions reveals who you truly are as an organization. When the pressure mounts, will you hide behind screens and algorithms, or will you lead with courage, compassion, and genuine respect for the people who’ve helped build your success?
The choice matters more than you think—not just for those directly affected, but for the trust and engagement of everyone who remains to carry your vision forward.
After all, business is relationships with purpose. Break the relationships, and you may find there’s not much purpose left to pursue.
