Another tech company is making job cuts and attributing them to AI.
Atlassian, an Australian-American proprietary software company that makes products like Jira, Trello, and Confluence, said on Wednesday that it is cutting about 1,600 jobs, roughly 10% of its global workforce, as the company restructures to focus on AI and enterprise growth.
In a filing with the US Securities and Exchange Commission, the Sydney-headquartered company said the layoffs are part of a broader effort to reposition the business for what CEO Mike Cannon-Brookes described as the "AI era." About 30% of the affected roles are based in Australia.
The layoffs follow those at Block, which owns financial services such as Cash App and Afterpay. Block laid off nearly half of its workforce and also attributed the cut to advancements in AI.
In a message to employees, Cannon-Brookes acknowledged the growing influence of AI on the company's workforce needs.
"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," Cannon-Brookes wrote.
"I believe this is the right decision for Atlassian. But that doesn't mean it's easy. Far from it," Cannon-Brookes added. "I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today."
Cannon-Brookes also addressed employees in a four-minute video.
Speaking on the "20VC" podcast in October last year, Cannon-Brookes shared a very different message.
"Five years from now, we'll have more engineers working for our company than we do today," he said, adding: "They will be more efficient, but technology creation is not output-bound."
This is because people will continue to come up with new ideas for the technology they want, and engineers will be needed to build it, he said.
A representative for Atlassian told Business Insider at the time that it had hired 95 new grads in its February 2025 intake and planned to have another 108 grads start in February 2026.
Read more about AI's impact
Atlassian was founded in 2002 by Cannon-Brookes and Scott Farquhar, both of whom are on Forbes' list of Australia's 50 richest people.
Based on the SEC filing, affected employees at Atlassian will receive a minimum 16-week severance package, along with extended healthcare benefits and prorated bonuses.
The cuts follow an aggressive AI push by Atlassian, including deals to acquire The Browser Company, which makes the Arc and Dia browsers, and developer intelligence platform DX, which it plans to integrate into products such as Jira and Bitbucket.
The shake-up at Atlassian has not spared higher-level roles. Chief technology officer Rajeev Rajan will step down on March 31 after nearly four years in the role.
The company saw a sales spike during the pandemic, when remote work drove demand for more collaborative tech.
Following the pandemic tech boom, Atlassian did a round of cuts in 2023 that affected 5% of the company.
The company's shares have fallen by around 64% over the past 12 months. According to the SEC filing, the restructuring is expected to cost Atlassian between $225 million and $236 million, primarily due to severance payments and reductions in office space.
The company's stock rose more than 1% in after-hours trading.
