Australian software giant Atlassian is cutting 1,600 jobs, or around 10 per cent of its global workforce, “to self-fund further investment in AI and enterprise sales”, the company announced on Thursday.
Around 30 per cent of the outgoing roles (almost 500) were Australian-based staff, an Atlassian spokesperson confirmed to Information Age.
Atlassian co-founder and CEO Mike Cannon-Brookes announced the news in a blog post and a video message to staff, in which he said he believed the cuts were “the right decision for Atlassian's long-term health”.
“We're focused on moving faster, staying disciplined on costs, and proving that we can grow profitably over the long-term by staying responsive to the world that we have to operate in,” he told the company’s workforce.
The changes sought to “rebalance” Atlassian to “accelerate building the future of teamwork in the AI era”, according to regulatory documents filed by the firm.
Atlassian said it expected to incur costs of up to $US236 million ($330 million) related to the layoffs, including for severance and benefits payments and office space reductions.
The company's share price was up around 2 per cent in after-market trading, but has fallen more than 60 per cent in the past 12 months while productivity software firms have faced rising competition from companies which sell AI agents.
Atlassian also reportedly began a hiring freeze earlier this year.
‘Things have changed’, Cannon-Brookes says
“Things have changed” in the world of software making, Cannon-Brookes said in a blog post, without specifically naming the rise of generative AI or AI agents.
“The bar for what ‘great’ looks like for software companies – on growth, on profitability, on speed, on value creation – has gone up,” he wrote.
“We are choosing to adapt. Thoughtfully, decisively and quickly. To drive durable, profitable growth.”
While Cannon-Brookes said Atlassian did not see AI as a replacement for human staff, he admitted “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”.
“This is primarily about adaptation,” he said.
“We are reshaping our skill mix and changing how we work to build for the future.”
Atlassian says around 30 per cent of outgoing staff were based in Australia. Image: Shutterstock
Atlassian’s restructure would allow it to “move faster”, including in AI and enterprise sales which “have high momentum and are accelerating”, he added.
The company, which has its own AI tool called Rovo, recently acquired an AI browser company and an AI-focused developer productivity platform to bolster its AI offerings.
The firm was “focused on retaining Atlassians with the skills to help us thrive as an AI-first company – this included strong performers, graduates, and Atlassians with transferable skills”, Cannon-Brookes said.
An increasing focus on AI has also been attributed to recent job losses at the likes of Telstra, WiseTech, the Commonwealth Bank, and Block.
Atlassian was “going beyond” severance requirements for its affected staff, Cannon-Brookes suggested – including by bringing forward bonuses.
“To Atlassians who are leaving us – I’m sorry for the impact this will have on you,” the chief executive wrote.
“… To Atlassians who are continuing on our journey – I know this is extremely challenging for you too, and we’ll work together to move forward in this next chapter.”
Atlassian CTO to ‘step down’
Chief technology officer Rajeev Rajan would “step down from the role” on 31 March 2026 after almost four years with Atlassian, the company also announced in its regulatory filings on Thursday.
“Atlassian is thankful for Mr Rajan’s many contributions in building a world-class R&D organisation and congratulates the promotion of next generation AI talent in Taroon Mandhana (CTO Teamwork) and Vikram Rao (CTO Enterprise and Chief Trust Officer),” the company announced.
Mandhana was previously Atlassian’s head of engineering for AI and products, while Rao was its chief trust officer.
Outgoing CTO Rajan has yet to publicly comment on the changes.
