Atlassian Cuts 1,600 Jobs as Company Pivots Toward AI Future

Atlassian, the Australian software company behind widely used collaboration tools like Jira, Confluence, and Trello, has announced a major restructuring that will eliminate about 1,600 jobs, roughly 10% of its global workforce. The layoffs are part of a broader effort by the company to shift its strategy toward artificial intelligence and strengthen its enterprise sales capabilities. While the move reflects a growing trend across the technology industry, it has sparked debate about whether AI is directly responsible for job losses or simply accelerating changes companies were already planning.

The job cuts will affect employees across multiple regions, with approximately 40% of the impacted workers located in North America, 30% in Australia, and around 16% in India. Smaller numbers of layoffs will occur across Europe, the Middle East, Africa, Japan, and the Philippines. According to the company, more than 900 of the affected roles are in software research and development, a key part of Atlassian’s workforce. The company had about 13,800 employees as of mid-2025, with more than half working in engineering and product design.

Atlassian co-founder and CEO Mike Cannon-Brookes explained the decision in a memo to employees, emphasizing that artificial intelligence is reshaping the kinds of skills companies need. While he rejected the idea that AI is simply replacing workers, he acknowledged that the technology is changing how work is done. “Our approach is not ‘AI replaces people,’” Cannon-Brookes wrote, but he noted that it would be unrealistic to ignore how AI is altering the mix of skills companies require and the number of roles needed in certain areas.

The restructuring is also part of Atlassian’s effort to improve its financial performance and invest more aggressively in AI-driven tools. The company generates most of its revenue from subscription-based collaboration software used by businesses worldwide. Despite continued revenue growth, including $1.6 billion in the final quarter of 2025, Atlassian has struggled with profitability and has recorded net losses for several years. Executives believe reorganizing around AI will help the company operate more efficiently and eventually move closer to breaking even.

Financially, the layoffs are expected to cost the company between about $225 million and $236 million, including severance payments and expenses related to reducing office space. The restructuring also includes leadership changes, with chief technology officer Rajeev Rajan stepping down at the end of March and being replaced by two executives described as part of the company’s next generation of AI leadership. Investors initially responded positively to the announcement, with Atlassian’s stock rising slightly in extended trading after the news was released.

For employees affected by the layoffs, Atlassian has announced severance packages that include at least 16 weeks of pay, extended healthcare coverage, and job placement assistance. However, labor groups such as Professionals Australia criticized the decision, arguing that employees should have been consulted before such a major restructuring. Atlassian’s move reflects a wider shift across the tech industry, where companies including Block, WiseTech, and Oracle are also reducing staff while increasing AI investments. As artificial intelligence continues to reshape the software sector, companies are reorganizing to remain competitive, leaving workers and businesses alike adapting to a rapidly evolving technological landscape.

Works Cited

Ittimani, Luca. “‘Devastating Blow’: Atlassian Lays Off 1,600 Workers Ahead of AI Push.” The Guardian, 12 Mar. 2026, www.theguardian.com/technology/2026/mar/12/atlassian-layoffs-software-technology-ai-push-mike-cannon-brookes-asx. 

Ford, Brody. “Atlassian to Reduce 1,600 Jobs in the Latest AI-Linked Cuts.” Bloomberg, MSN, 2026, www.msn.com/en-us/money/companies/atlassian-to-reduce-1-600-jobs-in-the-latest-ai-linked-cuts/ar-AA1YqNjH. 

Singh, Jaspreet. “Atlassian to Cut Roughly 10% Jobs in Pivot to AI.” Reuters, Yahoo Finance, 11 Mar. 2026, finance.yahoo.com/news/atlassian-lay-off-1-600-212610757.html. 

Readfearn, Graham, and Australian Associated Press. “‘Don’t F&*! The Planet’: Atlassian Issues Net Zero Guide for Companies Cutting Climate Impact.” The Guardian, 23 May 2023, https://www.theguardian.com/environment/2023/may/24/dont-f-the-planet-atlassian-issues-net-zero-guide-for-companies-cutting-climate-impact. 

“Atlassian to Cut About 10% of Workforce as It Ramps Up AI Spending.” The Wall Street Journal, https://www.wsj.com/tech/atlassian-to-cut-about-10-of-workforce-as-it-ramps-up-ai-spending-61dadade.