Australian tech leaders Atlassian and Canva are putting the screws on thousands of their workers for slacking off as redundancies become a reality in ‘difficult’ economic times.
Both companies, which have for years spruiked staff perks and fun offices as crucial to business successes, are now using five-tier staff performance rankings similar to industry leaders Microsoft and Amazon.
The changing cultures at both companies have come as key metrics tumble prompting calls to operate more efficiently.
Canva was valued at $US$40billion in 2021, but has been revised down by investors by as much as 67 per cent.
The changing cultures at Atlassian and Canva have come as key metrics tumble prompting calls to operate more efficiently in order to survive difficult economic conditions. Pictured, Canva CEO Melanie Perkins
A new performance review ratings system at Atlassian is expected to increase the number of the company’s staff who will be told they must improve. Pictured, Atlassian co-founder Mike Cannon-Brookes at right
Atlassian made 500 staff redundant earlier this year, just months after a much-publicised hiring spree. Pictured Scott Farquhar
Software company Atlassian’s earnings before interest, taxes, depreciation and amortization (known as EBITDA) was minus $77.74 million in 2022, a 154 per cent decrease on 2021.
Last week it announced it had cut 480 lower management positions, directing those employees to work on the ‘frontlines’ of the business in coding jobs.
Atlassian’s employee assessment categories for 2023 are unrecognizable from last year’s, which said 95 per cent of all staff had either ‘great’ or an ‘exceptional year’, rewarding them with bonuses and company shares.
Only 5 per cent of were told they’d had an ‘off year’.
But when Atlassian managers assess staff for their work in the 2022-23 year, the number who will be told they must improve will double on the previous year, the AFR reported.
Six per cent of staff will be told they ‘met most expectations’ while four per cent will get an ominous ‘did not meet expectations’.
Forty-five per cent will be told they ‘met expectations’, while 30 per cent will hear that they ‘exceeded expectations’.
About 15 per cent of staff will be told they ‘greatly exceeded expectations’.
Staff in the top two categories are understood to be in line for increases in financial rewards.
Last week Atlassion announced it had cut 480 lower management positions. Pictured, Mike Cannon-Brookes and his wife Annie pose during 2016 fashion week
People in the middle should get their full contracted bonus, and people on the lowest grade risk receiving no bonus or share grant for that year at all.
Those in the bottom rankings risk getting no bonus or shares for that year at all.
‘[Atlassian] haven’t done anything like this before,’ said one employee who asked to remain nameless.
‘It’s been a very chill company, vibing out, playing as a team, [and] now it’s becoming similar to Facebook, Google, Microsoft.’
Another staff member said the changes might stop some highly-paid employees from slacking off work early.
‘The fact that people were doing two hours of work and socialising all day was a zero interest rate phenomenon,’ he said.
Avani Prabhakar, Atlassian’s head of HR, told Daily Mail Australia it was constantly looking at new ways to improve its performance review processes as it grows.
‘Moving to a more differentiated system not only means better rewarding a larger group of people for exceptional performance, but it further clarifies the high bar we hold at Atlassian for the important work we do for our customers.’
In March this year Atlassian made 500 people redundant, or 5 per percent of is workforce.
Canva has had the tough systems, which are partly designed to identify under-performers at work, for two years while they are new to Atlassian.
At Canva, employees now get one of five ratings for their work in the previous year: Missing, Approaching, Thriving, Excelling or Redefining.
Those with lower ratings are put on internal coaching programs and tracked by management. The employees are given the chance to raise their performance levels, or fired.
The categories were developed with the company’s performance review process in 2021.
In 2021 95 per cent of Atlassian staff were deemed to have had a ‘great’ or ‘exceptional’ year but employees are now more likely to be rated as under-achievers. Pictured, Scott and Kim Farquhar at the GQ Men Of The Year Awards in 2017
Canva staff have noticed more of their colleagues being ‘performance-managed out’ of the company. Pictured Canva co-founders Cliff Obrecht and Melanie Perkins
In 2018 Canva was rated no.1 in Australia’s annual best places to work rankings, and its Sydney HQ had not just a gym, but also a library, a rooftop terrace with incredible views and a piano room.
But in 2023 Canva employees speaking on the condition of anonymity reported an increase in the number of staff being ‘performance-managed out’.
It is also understood that there has been more growth in the number of employees earning the top performance review ratings than drifting into the lower tiers.
Overall Canva continues to expand into the United States and has increased it staff headcount from 2700 in 2022 to 3700 in 2023.
