Why Atlassian Has Cut 10% of Jobs as AI Reshapes Workforce

Atlassian has announced it will cut 1,600 jobs – around 10% of its workforce – as it adapts to AI-driven changes in how the company operates and the skills it requires.

Employees affected by the redundancies were notified via email. In a memo shared on the company's website, Atlassian CEO Mike Cannon Brookes acknowledged that AI had fundamentally altered the organisation's workforce requirements.

He writes: "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."

Mike continued: "I believe this is the right decision for Atlassian. But that doesn't mean it's easy. Far from it. I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today."

Reshaping the workforce for AI

In the employee memo, Mike shared that the company is: "Executing incredibly well across our AI, Enterprise and System of Work transformations."

Atlassian reported a 20% increase in total revenue for its fiscal year 2025 results and 25% growth in cloud revenue last quarter. However, the company has seen its market value drop significantly – shares have decreased from US$300 in early 2025 to US$80 at the beginning of March – with investor concerns that AI could disrupt many of the services the company offers.

According to Mike, the company took a "thoughtful and incredibly thorough approach" to deciding which roles would be affected by the workforce reductions.

He says: "We made some structural org changes and focused on retaining Atlassians with the skills to help us thrive as an AI-first company – this included strong performers, graduates and Atlassians with transferable skills."

The cuts will be felt globally, with 30% reportedly affecting employees in Australia, where the company is headquartered.

Leadership changes follow restructure

As part of these changes, Atlassian has also announced that Rajeev Rajan, the company's Chief Technology Officer, will step down from his role after joining in 2022.

Mike says the company must adapt: "The bar or what 'great' looks like for software companies – on growth, on profitability, on speed, on value creation – has gone up."

AI-related redundancies accelerate globally

Atlassian's announcement follows widespread job losses attributed to AI. Research from Challenger, Gray & Christmas finds that companies announced more than 54,000 AI-related layoffs in the US during 2025, and an Acas survey from 2025 found that 26% of British employees are concerned about AI job cuts.

On 15 February 2025, fintech company Block announced it was laying off 40% of its workforce – or 4,000 jobs. CEO Jack Dorsey described this as a "difficult decision", but said that AI has "changed what it means to build and run a company".

However, Sam Altman, CEO of OpenAI, has said that he believes some companies are unfairly attributing AI to planned workforce cuts. At the AI Impact Summit in India on 20 February 2026, he told attendees: "I don't know what the exact percentage is, but there's some AI washing where people are blaming AI for layoffs that they would otherwise do, and then there's some real displacement by AI of different kinds of jobs".