Atlassian lays off 10% of workforce to fund AI investments

Atlassian workforce reduction details

Software manufacturer Atlassian is laying off approximately 10% of its workforce, totaling around 1,600 people. The company states this move is to "self-fund further investment in AI and enterprise sales while strengthening our financial profile," according to CEO Mike Cannon-Brookes.

Financial and operational specifics

The layoffs will incur costs of $225-236 million for severance payments and related expenses. These measures are scheduled to be completed by the beginning of the fourth quarter of the fiscal year. Atlassian has been unprofitable since 2017.

Impact on software roles

Approximately 900 job cuts affect developers and other positions in the software sector. Geographic distribution includes:

• 640 employees in North America
• 480 in Australia
• 250 in India

CEO's position on AI and workforce

CEO Mike Cannon-Brookes emphasized that Atlassian doesn't follow the philosophy of replacing people with AI, but stated: "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."

Company context and market position

Atlassian's stock price has fallen over 50% since the beginning of the year, currently at $75 compared to highs over $450 in 2021. The company reports cloud growth of 25% in the past quarter and approximately 5 million monthly active users of its AI tool Rovo. CTO Rajeev Rajan is stepping down at the end of March.

Industry context

Software companies face market pressure due to concerns that AI threatens traditional SaaS business models with per-user licenses. Atlassian is frequently cited as one of the companies particularly vulnerable to this shift.