‘Devastating blow’: Atlassian lays off 1,600 workers ahead of AI push | Atlassian
Software giant Atlassian announced it will lay off about 10% of its workforce, or about 1,600 positions, and replace its chief technology officer as it restructures to invest more in artificial intelligence.
There are more than 900 positions affected in software research and development, a spokesperson said. Most of Atlassian’s employees work in software engineering and design, accounting for more than 50% of its full-time workforce of 13,813 as of June 2025.
According to the spokesperson, approximately 640 affected employees are in North America, 480 in Australia and 250 in India, with the remainder spread across Japan, the Philippines, Europe, the Middle East and Africa.
The move was “the right decision for Atlassian,” company co-founder Mike Cannon-Brookes told employees in a memo published late Wednesday US time.
“But that doesn’t mean it’s easy,” he said. “Not at all. I know this has had a tremendous impact on each of you, and it places a heavy burden on me and Atlassian today.”
Atlassian has lost more than half its market value since the start of 2026 as investors fear artificial intelligence will make the software company’s services obsolete. The collapse in share prices wiped out more than half the net worth of the company’s Australian founders, Cannon-Brookes and Scott Farquhar.
In his statement, Cannon-Brookes suggested that the use of artificial intelligence changes the skills and roles the company needs, allowing for a restructuring that will strengthen the company’s financial position and “self-financing of further investment in AI and enterprise sales.”
Addressing the question of whether AI will replace the 1,600 laid-off workers, he wrote: “Our approach is not ‘AI replaces humans.’ But it would be disingenuous to claim that AI doesn’t change the skill mix we need or the number of roles required in certain areas.”
Atlassian left Slack work chat functions open for at least six hours longer than usual to allow employees to say goodbye to colleagues, Cannon-Brookes said.
“To the Atlassians who left us, I am sorry for the impact this will have on you,” he wrote. “Thank you for everything you contribute to our epic story.”
Professionals Australia, the union representing Atlassian workers, said affected employees were informed on Thursday, the consultation process will last until March 19, and final redundancies are expected on April 2.
Paul Inglis, director of Professionals Australia, said workers were made redundant without being consulted or given any indication that the restructuring would affect their jobs.
“These are experienced professionals who helped build one of Australia’s most successful technology companies from the ground up,” Inglis said.
“They deserve respect, transparency and appropriate consultation when important decisions about their livelihoods and future careers are made.”
He added that hundreds of Australian Atlassian workers joined the union to have a say on the use of AI in their workplaces ahead of Atlassian’s “devastating coup”.
A union spokesman said Professionals Australia had requested an urgent meeting to discuss Atlassian’s introduction of AI technology and its direct link to the redundancies. Atlassian declined to comment.
Affected employees were expected to receive a $1,000 “technology payout” after returning their corporate laptops, along with a minimum separation package consisting of 16 weeks of salary, extended healthcare plans, and early prorated bonuses.
Employees will also receive “optional” one-on-one meetings with HR. While those on planned parental leave will receive full payments, extra support will be offered to those on a visa or looking for a new job at the company.
As a result, the laid-off Australian employees will be paid but will not be expected to work at Atlassian for the final three weeks.
The layoffs and related costs are expected to total up to $174 million (A$246 million), while office space reductions will include exit fees of at least $62 million (A$87 million), the company said. Most costs will be incurred by the end of March and will be paid by the end of June.
Similar outages attributed to artificial intelligence at other technology companies
Atlassian increased its revenue by attracting subscriptions to workflow apps such as Jira, Confluence and Trello, generating revenue of US$1.6 billion (AU$2.3 billion) in the final three months of 2025, up US$300 million from the previous year.
It is unprofitable and has recorded losses of millions each year since 2017; this includes a net loss of US$42 million in the last three months of 2025, down from US$38 million a year earlier.
Cannon-Brookes said the restructuring will accelerate the company’s progress toward break-even. Investors bought into Atlassian following the announcement, with the share price rising 4% in extended trading on Nasdaq.
Atlassian told regulators on Wednesday that as part of the restructuring, chief technology officer Rajeev Rajan will step down at the end of March and be replaced jointly by Taroon Mandhana and Vikram Rao, described as a “next-generation AI talent”.
Atlassian’s round of job cuts comes weeks after similar cuts attributed to artificial intelligence by tech giant Block, which owns Afterpay, and Australian tech firm WiseTech.
Block has cut 40% of its global workforce from 10,000 to fewer than 6,000, and co-founder Jack Dorsey said improvements in productivity due to AI had “fundamentally” changed the company.
WiseTech announced that it will lay off 2,000 people (about 30% of its workforce) over two years.
Both companies have seen their share prices fall over the past six months, and analysts have suggested each has reasons to reduce headcount beyond just the use of AI.
