Atlassian has announced plans to cut approximately 10 percent of its global workforce – around 1,600 employees – as part of a strategic shift towards artificial intelligence and enterprise growth.
The Australian collaboration software firm said the move is part of its ongoing efforts to reshape its “skill mix” and change how the company works to “build for the future”.
In a company-wide message, CEO Mike Cannon-Brookes said: “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. It does. This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future.”
The job cuts come as Atlassian looks to self-fund further investment in AI and enterprise sales, while strengthening its financial profile.
According to Cannon-Brookes, the company is also “changing the way we work and reorganising around our system of work to move faster.”
Investment In AI
The layoffs reflect a strategic shift in Atlassian’s priorities.
Cannon-Brookes stated that the decision would allow the company to focus on AI initiatives and enterprise sales: “The bar for what ‘great’ looks like for software companies – on growth, on profitability, on speed, on value creation – has gone up.”
Despite reporting strong growth in certain areas, including over 25 percent revenue growth from cloud products and more than five million users for its new Rovo AI suite, Atlassian’s market performance has faced headwinds.
The company’s market capitalisation peaked at around $112 billion in 2021 but fell to roughly $30 billion by early 2023.
Shares recently traded around $75 apiece, with a slight pop to $78 in after-hours trading following the CEO’s announcement.
Cannon-Brookes emphasised the company’s positive momentum, writing: “We have momentum. We are executing incredibly well across our AI, Enterprise and System of Work transformations.”
Wider Market Pressures, AI, and Tech Layoffs
The past year has seen a wave of AI-driven workforce reductions across the technology sector, illustrating the growing impact of automation and efficiency pressures.
In February, payments company Block Inc. cut more than 4,000 employees, with CEO Jack Dorsey noting that AI automation would reduce the need for many roles.
Microsoft eliminated over 6,000 positions in May 2025, followed by a further 9,000 cuts later in the year amid organisational restructuring tied to AI priorities.
Meta cut roughly 600 roles in its AI unit, while its Reality Labs division faced around 10 percent workforce reductions as the company shifted focus from metaverse projects to AI and core products.
Amazon confirmed plans to cut approximately 14,000 corporate roles in late 2025, continuing earlier reductions linked to AI and cloud efficiency drives.
Other major firms, including Intel, IBM, and Google, have also trimmed staff as they balance automation investment with cost-control pressures.
Atlassian also announced that CTO Rajeev Rajan will step down after nearly four years. A SEC filing noted:
“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).”
Cannon-Brookes has tried to frame the layoffs as part of a strategy to adapt to market conditions while continuing investment in AI and enterprise growth.
“Decisions require heart (humanity, empathy, passion), and balance (pragmatism, trade-offs, decisiveness). In this moment, we are balancing making the right (hard) decision for Atlassian.”
These developments illustrate the broader implications of AI for enterprise software and workforce planning.
As generative AI tools become capable of automating tasks such as coding, documentation, and workflow management, companies are reassessing staff requirements and prioritising roles that complement AI capabilities. The trend highlights how technology firms must balance efficiency, investment, and human talent to maintain growth amid rapid transformation.
