Australian technology leaders Atlassian and Canva are pranking thousands of their workers for slacking off as layoffs become a reality in ‘difficult’ economic times.
Both companies, which have long viewed employee benefits and fun offices as critical to business success, now use five levels of employee performance rankings, similar to industry leaders Microsoft and Amazon.
The changing cultures at both companies have caused key metrics to tumble and call for greater efficiency.
Canva was valued at $40 billion in 2021, but has been revised down by investors by as much as 67 percent.
The changing cultures at Atlassian and Canva have come as key metrics tumble, calling for more efficiency to survive difficult economic conditions. Pictured is Melanie Perkins, CEO of Canva
A new performance appraisal grading system at Atlassian is expected to increase the number of company employees who are told they need to improve. Pictured right is Atlassian co-founder Mike Cannon-Brookes
Atlassian laid off 500 employees earlier this year, just months after a much-publicized hiring wave. Pictured is Scott Farquhar
Software company Atlassian’s earnings before interest, taxes, depreciation and amortization (known as EBITDA) were minus $77.74 million in 2022, down 154 percent from 2021.
Last week it announced it had cut 480 lower management positions, leaving those employees on the “front lines” of the company to work in coding roles.
Atlassian’s rating categories for 2023 are beyond recognition from last year’s, which stated that 95 percent of all staff had a “great” or an “exceptional year” and rewarded them with bonuses and company shares.
Only 5 percent of them were told that they had had an ‘off year’.
But when Atlassian managers rate staff on their work in the year 2022-23, the number told to improve will double from the previous year, the AFR reported.
Six percent of staff are told they ‘met most expectations’, while four percent get an ominous comment ‘did not meet expectations’.
Forty-five percent are told they “met expectations,” while 30 percent are told they “exceeded expectations.”
About 15 percent of staff are told that they “greatly exceeded expectations.”
Personnel in the top two categories are considered eligible for higher financial rewards.
Last week, Atlassion announced that it had cut 480 lower management positions. Pictured are Mike Cannon-Brookes and his wife Annie posing during 2016 Fashion Week
Middle-ranking people should get their full contracted bonus, and lower-ranking people risk getting no bonus or stock grant at all for that year.
Those in the lowest rankings risk not getting any bonus or shares at all that year.
‘[Atlassian] I’ve never done anything like this before,” said one employee who declined to be named.
‘It has been a very chill company, there was an atmosphere, we played as a team, [and] now it’s starting to become comparable to Facebook, Google, Microsoft.’
Another member of staff said the changes could discourage some high-paid workers from taking early retirement.
“The fact that people were working for two hours and socializing all day was a zero-interest phenomenon,” he said.
Avani Prabhakar, Atlassian’s head of HR, told Daily Mail Australia it was constantly looking for new ways to improve 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 also clarifies the high bar we set at Atlassian for the important work we do for our customers.”
In March this year, Atlassian laid off 500 people, or 5 percent of its workforce.
Canva has had the robust systems, designed in part to identify underachievers at work, for two years while new to Atlassian.
At Canva, employees now receive one of five ratings for their work in the previous year: Missing, Approaching, Thriving, Excelling, or Redefining.
Those with lower ratings are placed on internal coaching programs and monitored by management. The employees are given the opportunity to increase their performance level or are fired.
The categories were developed with the company’s 2021 performance review process.
In 2021, 95 percent of Atlassian employees were deemed to have had a “great” or “exceptional” year, but employees are now more likely to be rated as underachievers. Pictured, Scott and Kim Farquhar at the 2017 GQ Men Of The Year Awards
Canva employees have noticed that more of their colleagues are being “managed out of the company.” Pictured Canva co-founders Cliff Obrecht and Melanie Perkins
In 2018, Canva was ranked #1 in Australia’s annual Best Places to Work list, and its Sydney headquarters boasted not only a gym, but also a library, a rooftop terrace with incredible views and a piano room.
But in 2023, Canva employees who spoke on condition of anonymity reported an increase in the number of employees who are “managed by performance.”
It’s also clear that there’s been more growth in the number of employees earning top performance ratings than it’s drifting down to the lower levels.
Overall, Canva continues to expand into the United States, increasing its workforce from 2700 in 2022 to 3700 in 2023.