Atlassian Corp. plans to cut 1,600 jobs or a 10th of its global workforce, joining rivals in slashing staffing to cope with the advent of AI and a broader post-Covid industry slowdown.
Australian billionaire founder Mike Cannon-Brookes explained the reductions in a staff memo, while also announcing his chief technology officer was leaving the Sydney-based company.
The reductions are the latest AI-linked cuts in the software industry and beyond, as companies across the globe adapt to an era in which the technology can handle many of the tasks thus far performed by humans. Still, companies are also facing skepticism they are exploiting AI fears to dress up old-fashioned cost-cutting as technological futurism.
“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,” Cannon-Brookes said. “It does.”
The topic of “AI-washing” has transfixed Silicon Valley players in recent months, in the wake of layoffs from Jack Dorsey’s Block Inc. as well as Oracle Corp. Many tech companies hired aggressively during the pandemic, when online and digital activity boomed and many firms struggled to keep pace with that demand. At the same time, concerns are growing that AI will reduce a reliance on external software tools, eroding the lucrative business of enterprise IT services. While AI hasn’t yet translated into clear productivity gains, many companies are seeking ways to do more with less.
What Bloomberg Intelligence Says:
Atlassian’s 10% head-count reduction reinforces our caution that AI-led disruption will pressure traditional seat growth and force SaaS companies to defend margins as revenue shifts. As AI inferencing-driven revenue grows, we anticipate lower gross margin on incremental sales. The CTO’s departure adds to executive risk amid leadership transitions over the past year.
-Sunil Rajgopal, analyst
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Cannon-Brookes’ rationale was reminiscent of one given by Dorsey’s Block, which pointed to AI last month when moving to fire about 40% of its staff. Oracle, too, has said that AI is allowing the company to make some software development teams smaller.
In Australia, WiseTech Global Ltd. last month announced plans to ax almost 30% of staff within two years and said AI-fueled savings will ultimately cut through the entire company. Commonwealth Bank of Australia said it is cutting around 300 jobs as it rethinks how to develop its workforce in the AI age.
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Atlassian, the designer of office tools such as Trello, has seen its share value plummet more than 60% since Cannon-Brookes took full control of the company in 2024. The billionaire has talked openly about his efforts to pivot toward AI, calling the technology “one of the best things that’s ever happened” to Atlassian — even as investors globally pummeled shares in software firms vulnerable to AI advancements.
Atlassian expects to incur about $230 million in expenses such as severance costs due to the cuts. The company’s stock rose about 1.5% in extended trading after the layoffs were announced.
“The bar for what ‘great’ looks like for software companies — on growth, on profitability, on speed, on value creation — has gone up,” Cannon-Brookes said in the memo.