Software giant Atlassian on Wednesday announced it is cutting around 10% of its workforce or 1,600 employees. Shares of the company rose about 2% in extended trading after it announced its layoffs, Reuters reported.
Atlassian co-founder Mike Cannon-Brookes, in a memo to employees, wrote, “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.”
Brookes added that the decision to cut the workforce was taken to “self-fund further investment in AI and enterprise sales,” along with strengthening the company’s financial profile.
“We’re also changing the way we work and reorganising around our System of Work to move faster,” Brookes said in the memo.
Atlassian has also announced that its Chief Technology Officer, Rajeev Rajan, will step down effective 31 March. Meanwhile, Taroon Mandhana will take up the role of CTO Teamwork, and Vikram Rao will be the new CTO Enterprise and Chief Trust Officer.
As per a Reuters report, Atlassian expects its restructuring plan to be substantially completed by the end of the fourth quarter. The company also expects a smaller number of job cuts across Europe, the Middle East, Africa, Japan and the Philippines.
Notably, Atlassian has lost more than half its market value since the start of 2026 and over 60% since Brookes took control of the company in 2024.
Is AI replacing these roles?
In its blog post, Brookes said that Atlassian’s approach is not “AI replaces people”. However, he admitted that AI changes the “mix of skills” required by the company, along with the number of roles required in certain areas.
“This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future.” Brookes noted.
For employees affected by the layoffs, Atlassian has announced 16 weeks of pay, plus an additional week for every year of service.
The company also says eligible employees will receive pro-rata bonuses. They will also get a $1,000 “technology payment” upon returning their corporate laptops.
“We’ve navigated – and thrived through – multiple technology shifts. Multiple market cycles. And we will again. This will require continual adaptation. Decisiveness. And making hard decisions to set Atlassian up strongly for the long term,” Brookes added in the blog post.