‘Devastating blow’: Atlassian lays off 1,600 workers ahead of AI push
Software giant Atlassian has announced it is laying off about 10% of its workforce, or roughly 1,600 positions, and replacing its chief technology officer as it restructures to invest further in artificial intelligence.More than 900 affected positions were involved in software research and development, a spokesperson said.Most of Atlassian’s employees work in software engineering and design, accounting for over 50% of its 13,813 full-time workforce in June 2025.About 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, according to the spokesperson.The company’s co-founder, Mike Cannon-Brookes, told employees the move was “the right decision for Atlassian” in a note circulated late Wednesday, US time.
“But that doesn’t mean it’s easy,” he said.“Far from it.I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today.”Atlassian has lost more than half its market value since the start of 2026 as traders grow to fear AI will make the software company’s services obsolete.The share price plunge has wiped more than half the net worth of the company’s Australian founders, Cannon-Brookes and Scott Farquhar.
Cannon-Brookes suggested in his statement that AI use had changed the skills and roles the company needed, allowing a restructure to strengthen the company’s financial standing and “self-fund further investment in AI and enterprise sales”.Addressing the question of whether AI had replaced the 1,600 sacked employees, he wrote: “Our approach is not ‘AI replaces people’.But it would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas.”Atlassian left its Slack work chat functions open for at least six hours longer than usual, to permit employees to farewell their colleagues, Cannon-Brookes said.“To Atlassians who are leaving us – I’m sorry for the impact this will have on you,” he wrote.
“Thank you for everything you have contributed to our epic story.”The union representing Atlassian workers, Professionals Australia, said impacted employees were told on Thursday, with a consultation process to last until 19 March and final termination expected on 2 April.Paul Inglis, a director at Professionals Australia, said workers had been made redundant without being consulted or given any sign a restructure would affect their jobs.“These are experienced professionals who have helped build one of Australia’s most successful technology companies from the ground up,” Inglis said.“They deserve respect, transparency and proper consultation when major decisions about their livelihoods and their future careers are made.
”Hundreds of Australian Atlassian workers had joined the union to seek a say in AI use in the workplaces ahead of Atlassian’s “devastating blow,” he added.A union spokesperson said Professionals Australia had requested an urgent meeting to discuss Atlassian’s introduction of AI technology and its direct connection to the redundancies.Atlassian declined to comment.Affected employees were expected to receive a minimum separation package of 16 weeks’ pay, extended healthcare plans and early pro rata bonuses, as well as a US$1,000 “technology payment” once they returned their corporate laptop.Employees would also receive “optional” one-on-one calls with HR.
Those with scheduled parental leave would be paid out in full, while extra support would be offered to those on visas or looking for new jobs in the company.Australian employees who are ultimately made redundant will be paid but not expected to work for their final three weeks at Atlassian.The company reported redundancies and related costs were expected to total up to $174m (A$246m), while office space reductions would involve exit charges of at least $62m (A$87m).Most costs would be incurred by the end of March and paid by the end of June.Atlassian has grown its revenue by attracting subscriptions to its workflow apps, including Jira, Confluence and Trello, recording US$1.
6bn (A$2.3bn) revenue in the last three months of 2025, up US$300m from the prior year.It is not profitable and has recorded millions in losses every year since 2017, including a net loss of US$42m in the last three months of 2025, up from US$38m the prior year.Cannon-Brookes said the restructure would accelerate the company’s progress towards breaking even.Investors bought into Atlassian after the announcement, sending its share price up 4% in extended trading on the Nasdaq.
Atlassian told regulators on Wednesday the restructure would also see its chief technology officer, Rajeev Rajan, step down at the end of March, to be replaced jointly by Taroon Mandhana and Vikram Rao, described as “next generation AI talent”,Atlassian’s redundancy round comes weeks after similar cuts attributed to AI by tech giant Block, the owner of Afterpay, and Australian technology firm WiseTech,Block cut 40% of its global workforce, from 10,000 to under 6,000, with cofounder Jack Dorsey saying improvements in productivity due to AI had “fundamentally” changed the company,WiseTech announced it would cut 2,000 jobs over two years – about 30% of its workforce,Both companies had seen their share prices plunge over the preceding six months and analysts have suggested each had reason to cut headcount other than AI use alone.
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