The tech giant announced the axing of 1,600 jobs as AI upheaval hits home
Australian software heavyweight Atlassian will shed around 1,600 staff – about 10% of its global workforce – in one of the Australia's most significant tech restructures of the AI era, as the company races to redefine itself as “AI‑first”.
The Sydney‑founded collaboration software maker confirmed the cuts in a filing to US regulators and in internal messages to staff on Thursday, saying the move is designed to “rebalance” the business so it can pour more money into artificial intelligence and enterprise sales while shoring up profitability.
About 30% of the roles – roughly 480 to 500 jobs – are in Australia, with the remainder spread across Atlassian’s global offices. Impacted workers began receiving emails today, with staff told they would know within about 20 minutes whether their roles had been cut or consultation processes were beginning in their region.
‘Adaptation’, not just cost‑cutting, CEO insists
Chief executive and co‑founder Mike Cannon‑Brookes described the decision as one of the hardest in the company’s 23‑year history, acknowledging the personal toll on staff even as he argued the company had little choice but to adapt to a rapidly changing market.
In a video and written message to employees, Cannon‑Brookes said AI was reshaping which skills Atlassian needs and how many people it requires in particular parts of the business. He rejected the idea that the company was simply replacing humans with machines, but conceded it would be misleading to pretend advanced AI tools were not changing staffing needs.
Internally, more than 100 Atlassian leaders and HR specialists were involved in the process of deciding which roles would go, with a focus on retaining staff with AI‑related or transferable skills. The restructure touches teams across the company, as Atlassian reorganises “around its system of work” in an attempt to move faster and build products designed for an AI‑saturated workplace.
The company says the cuts are “self‑funding”: by reducing headcount, Atlassian aims to free up hundreds of millions of dollars to invest in new AI features, infrastructure and sales capacity aimed at large corporate customers, while also meeting the market’s tougher expectations on growth and margins.
Payouts, perks and a bruising bill
Atlassian expects to book between US$225 million and US$236 million in charges linked to the redundancies and associated office downsizing, most of it hitting in the current quarter. That includes severance payments and exit costs as the company trims its physical footprint, even as construction continues on its $1.45 billion flagship headquarters at Sydney’s Central station tech precinct.
Affected employees will receive at least 16 weeks’ pay, plus an additional week for each year of service. There are also pro‑rated bonuses for the 2026 financial year, six months of extended health cover for eligible staff and their families, and a US$1000 technology stipend once staff return their corporate laptops so they can buy new devices.
Internally, Cannon‑Brookes urged staff to look out for each other, encouraging those staying to support colleagues who are leaving and promising a company‑wide town hall next week to answer further questions.
Slack, Atlassian’s workplace chat tool, is being kept open on mobile devices for several hours for departing staff so they can say their goodbyes and exchange details with teammates around the world.
Part of a global AI jobs reckoning
Atlassian’s move adds to a growing list of tech firms slashing staff under the banner of AI transformation. Earlier this month, Afterpay owner Block cut more than 4,000 jobs citing artificial intelligence, while other software and cloud players including WiseTech Global, Amazon, Pinterest and CrowdStrike have all announced their own restructures.
Global executives, including those at the World Economic Forum in January, have long argued that AI will both eliminate and create jobs. But many have also acknowledged that companies are using AI as a justification to accelerate redundancies that may have been coming anyway as investors demand leaner operations.
In Atlassian’s case, the restructure follows a sudden hiring freeze in engineering and related roles last month, which saw interviews cancelled and job offers quietly withdrawn as the company recalibrated its headcount needs. Prospective staff took to online forums to complain of being left in limbo or “ghosted” after investing weeks in recruitment processes.
The latest cuts also coincide with leadership changes at the top of Atlassian’s engineering ranks. Chief technology officer Rajeev Rajan will step down at the end of March, after nearly four years in the role. Two new CTO positions will take his place: one focused on the company’s “Teamwork” products and the other on enterprise and trust, including its AI roadmap.
For the broader tech sector, today’s announcement is another sign that the AI era will not just be about shiny new products and productivity gains, but about painful trade‑offs: fewer traditional roles, more emphasis on specialised skills, and a widening gap between companies and workers who can adapt – and those who can’t.
