You're currently following this author! Click to unsubscribe from email alerts. Author of the AI Insider newsletter On a recent weekend, I was playing with my new puppy when my phone rang. On the ...
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The Atlassian logo on a Formula 1 car Marcel van Dorst/Reuters 2026-03-12T18:02:45.413Z Read in app Copy link Email Facebook WhatsApp X LinkedIn Bluesky Threads lighning bolt icon An icon in the shape of a lightning bolt. Impact Link .save-icon-fill { display: none; } .save-icon.is-active .save-icon-fill, .save-icon-fill.is-active { display: block; fill: currentColor; } Save Saved Listen to this story This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in. On a recent weekend, I was playing with my new puppy when my phone rang. On the other end was the CEO of a major public software company with a warning: the industry was headed for painful financial reset.
I can't say who this is because he doesn't want to be identified, talking about sensitive topics — and he wanted to speak honestly, without the usual restrictions of his company's public relations department. These are the times you really listen!
The topic was broadly about how AI is disrupting software and impacting the business models of companies that offer software as a service, or SaaS. I've covered this deeply for about a year, so this wasn't a surprise. But one of his main messages was unexpected — and is already proving prescient.
This CEO said stock-based compensation, or SBC, is too high for SaaS companies now. Future revenue growth may not be as strong anymore, so SBC has to come down, and the financial discipline of the software industry has to improve. This year, SaaS companies will have to cut a lot of employees to adjust, he predicted.
I'll explain this more in a second, but this reality is already beginning to play out. On Wednesday, a prominent software provider called Atlassian said it's cutting 10% of its workforce. That followed Block's 40% job cuts.
