Atlassian to lay off 1,600 employees amid push for AI transformation

Atlassian, the software company, has announced to lay off nearly 10 per cent of its workers, marking roughly 1,600 positions, along with the replacement of its chief technology officer, in order to invest further in artificial intelligence. A company spokesperson said that over 900 positions in software research and development have been affected, accounting for more than 50 per cent of its 13,813 full-time workforce in June 2025.

In addition, around 640 affected employees are in North America, 480 in Australia, and 250 in India, with the rest from Japan, the Philippines, Europe, the Middle East, and Africa, the spokesperson said, The Guardian reported.

Mike Cannon-Brookes, the company’s co-founder, stated that the decision to lay off was “the right move for Atlassian” in a note circulated late Wednesday, US time. “But that doesn’t mean it’s easy,” he said. “Far from it. I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today," Mike said.

Atlassian loses market value

Atlassian has seen its market value drop by more than half since the beginning of 2026, as investors worry that advances in AI could make some of the software company’s services less relevant. The sharp fall in the share price has also slashed the personal fortunes of its Australian co-founders, Mike Cannon-Brookes and Scott Farquhar.

Cannon-Brookes indicated that the growing adoption of AI has reshaped the types of skills and roles the company requires. According to him, the restructuring aims to improve Atlassian’s financial position and enable it to fund further investments in AI and enterprise sales.

Answering the query whether AI had replaced the 1,600 sacked employees, he said, “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 in certain areas.”

He also said the company kept its Slack work chat channels open for about six hours longer than usual so employees could say goodbye to colleagues. “To Atlassians who are leaving us – I’m sorry for the impact this will have on you,” he wrote. “Thank you for everything you have contributed to our epic story.”

Meanwhile, Professionals Australia, the union representing Atlassian employees, said affected workers were informed on Thursday. The consultation process is expected to continue until March 19, with final job terminations likely on April 2. Union director Paul Inglis said staff were made redundant without prior consultation or warning that a restructuring could threaten their roles.