In a significant workforce reduction, Atlassian announced it will eliminate approximately 1,600 positions, representing 10% of its global staff. The Australian software firm described the move as a restructuring effort to reorient the company toward artificial intelligence and enterprise sales. Following the news, the company's shares climbed over 4% in after-hours trading.

Co-founder Mike Cannon-Brookes informed employees the decision was necessary for Atlassian's future, but acknowledged the human cost. "I know this has a huge impact on each of you, and it weighs heavily on me," he wrote. The layoffs are geographically widespread, with major impacts in North America (640 employees), Australia (480), and India (250).

The announcement arrives as Atlassian's market value has fallen more than 50% since January 2026, with investors concerned about AI's potential disruption to its core products. This decline has sharply reduced the fortunes of Cannon-Brookes and fellow founder Scott Farquhar.

Cannon-Brookes stated that AI adoption is altering the required skill sets within the company, enabling a restructuring to improve finances and internally fund new AI initiatives. He directly addressed whether AI caused the job losses: "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."

The company extended access to its internal communication channels to allow staff to say goodbye. Departing employees will receive a minimum of 16 weeks' pay, continued healthcare, pro-rated bonuses, and a $1,000 stipend for returning equipment.

Atlassian's cuts follow similar workforce reductions at other tech firms, including Block and WiseTech, which have also linked restructuring to AI efficiency gains and shifting market conditions.

Source: The Guardian