Australian-born software company Atlassian is set to sack 5 per cent of its workforce which is about 500 employees.
Co-founders billionaire Mike Cannon-Brookes and Scott Farquhar wrote in an update to employees the company had to rebalance the team to better position Atlassian for the long term.
"Today marks a very hard day in our 20-year history," the memo to employees read.
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"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 co-founders claimed the decision to sack the employees wasn't a reflection of the company's financial performance.
Instead, it cited re-organising the company to focus resources into "the most critical work" including cloud computing.
"We've made hard calls to reduce our investment in specific areas, in order to reinvest in others," the founders said.
"This is different to a financially-driven reduction, where you would look to make 'broad-based cuts' – for example, a 10 per cent cut equally distributed across every org within the company.
"This is not what is happening here."
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The most impacted teams include talent acquisition, program management and research and insights.
"We want to be clear these decisions are not a reflection of our teammates' work," the company said.
"Every single person has made contributions that have changed our company for the better and will leave a lasting impact on their peers and teams.
"This is about rebalancing the roles we need across Atlassian first and foremost."
It comes as a plethora of technology companies including giants Google, Microsoft and Amazon have revealed layoffs in recent months.
Tech layoffs have occurred as a result of the slowing economy with inflation weighing on consumer spending and rising interest rates squeezing company funding.
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