Software company Atlassian announced its decision to lay off 500 workers, or about 5% of its workforce amid ongoing cutbacks in the tech sector. 

In a blog post, Co-founders and Co-Chief Executives Mike Cannon-Brookes and Scott Farquhar gave a clear hint that the downsizing is aimed at recruiting, program management, and research and that savings will be reinvested in other areas of the company. 

"We’ve made hard calls to reduce our investment in specific areas, in order to reinvest in others. This is different to a financially-driven reduction, where you would look to make ‘broad-based cuts’ – for example, a 10% cut equally distributed across every org within the company," they wrote.

The affected staff can remain and communicate with their teams until the end of the week, the CEOs said. 

A filing with the Securities and Exchange Commission by Atlassian disclosed that the layoffs will result in $70 million to $75 million in charges in the fiscal third quarter, with $27 million to $29 million in cash charges and the rest non-cash, such as accelerated vesting of stock and office-space reductions. 

The outgoing employees would get 15 weeks of severance pay, plus one additional week per year of service, with unused paid time off also getting paid out. 

Besides all these, Atlassian is going to offer accelerated vesting and employer-sponsored healthcare for the next six months, along with visa support. Employees will be allowed to keep their work laptops with them.

The stock of Atlassian, which is credited with software programmes such as Jira and Confluence, declined by 34.2% in the past 12 months.