Atlassian Cuts 10% of Workforce, Citing Impact of AI Era

Atlassian, the Australian-American software company known for products like Jira and Trello, is restructuring its workforce. On Wednesday, the company announced it would lay off approximately 1,600 employees, equating to about 10% of its global workforce. This significant move is attributed to an increased focus on artificial intelligence (AI) and enterprise growth, as stated in a filing with the US Securities and Exchange Commission.

Layoff Details

• Approximately 1,600 jobs cut, representing 10% of the total workforce.
• About 30% of the affected positions are based in Australia.
• Those impacted will receive a minimum 16-week severance package, extended healthcare benefits, and prorated bonuses.

Company’s Shift Toward AI

CEO Mike Cannon-Brookes highlighted the necessity of this move, emphasizing how AI affects workforce dynamics. He remarked, “It would be disingenuous to pretend AI doesn’t change the mix of skills we need.” Despite his acknowledgment of the difficulties these layoffs pose, he reiterated the need for this strategic shift.

The layoffs come shortly after similar job cuts at Block, the parent company of financial services like Cash App. Block attributed its cuts, affecting nearly half of its workforce, to advancements in AI as well.

Future Plans and Industry Impact

In a four-minute video message shared with employees, Cannon-Brookes expressed the emotional weight of the decision but insisted that it was crucial for Atlassian’s future. Notably, last year on the “20VC” podcast, he predicted that the company would employ more engineers in five years, albeit more efficiently due to advancements in technology.

A representative for Atlassian confirmed the company had hired 95 new graduates in February 2025, with plans for another cohort of 108 in February 2026.

Financial Implications

The SEC filing indicated that the restructuring will cost Atlassian between $225 million to $236 million, primarily due to severance payments and a reduction in office space. The company’s shares have declined by approximately 64% over the past year, though they saw a modest rise of over 1% after the announcement.

Leadership Changes

This restructuring is accompanied by significant leadership transitions. Chief Technology Officer Rajeev Rajan will step down on March 31, after nearly four years in his position.

The move to streamline the workforce follows a peak in demand during the pandemic, which saw a rise in collaborative technology usage. As Atlassian navigates the evolving tech landscape, the emphasis on AI indicates a pivotal shift in the company’s operational focus and long-term strategies.