The move is part of a larger restructuring effort to boost investment in artificial intelligence (AI) and the company's financial position.

Apart from the layoff, the company will also undergo a transition in technology leadership by replacing the chief technology officer as the firm shifts its attention to next-generation AI technology.

Majority of Atlassian Layoffs From Software Research and Development

According to company officials, over 900 of these positions are in software research and development. Atlassian has a highly concentrated workforce in technical roles. Currently, over half of its 13,813 employees as of June 2025 work in software engineering and design.

The layoffs will be spread across various regions. About 640 workers in North America, 480 workers in Australia, and 250 workers in India will be impacted. The rest are from various locations including Japan, the Philippines, Europe, the Middle East, and Africa.

Atlassian Co-founder Mike Cannon-Brookes Says Decision Was Difficult

The news of the layoff was announced by Atlassian co-founder Mike Cannon-Brookes to the employees through a message sent on Wednesday night. He said that the decision to lay off the employees was a necessary one for the future of the company. He said:

"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."

However, Atlassian has come under a lot of pressure in 2026 as it has lost more than half of its market value since the beginning of 2026. Investors are concerned that advances in artificial intelligence could affect traditional software services.

The fall in its share price has impacted the wealth of co-founders Cannon-Brookes and Scott Farquhar.

How Artificial Intelligence Is Changing Atlassian's Workforce Needs

Cannon-Brookes explained that the increasing use of AI is also affecting the nature of skills that are necessary within the company. The restructuring is intended to shift teams and resources to work more on AI development and selling to enterprises.

Responding to fears that AI had replaced human workers, Cannon-Brookes explained, "Our approach is not 'AI replaces people'. But 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."

As a way of giving workers time to bid farewell to colleagues, Atlassian kept its internal Slack chat channels open for six hours longer than usual. In a message to workers who are leaving, Cannon-Brookes wrote, "To Atlassians who are leaving us - I'm sorry for the impact this will have on you." "Thank you for everything you have contributed to our epic story."

Union Criticises Atlassian Over Lack of Consultation

The union representing the Atlassian workers, Professionals Australia, said the workers were notified about the layoffs on Thursday. The consultation process is likely to go on until March 19.

The final round of job termination is likely to happen on April 2. Union director Paul Inglis said the company had not consulted the employees before taking the decision. "These are experienced professionals who have helped build one of Australia's most successful technology companies from the ground up." "They deserve respect, transparency, and proper consultation when decisions are being made about their future careers." The union wants to hold an urgent meeting with the company about the introduction of AI technology and the possible connection to the job cuts.

Severance Package and Support for Laid-Off Employees of Atlassian

Employees affected by the layoffs will be given a minimum severance package that includes 16 weeks' salary. Other benefits will include extended health benefits, early pro-rated bonuses, and a "technology payment" of $1,000 once corporate laptops are returned.

Employees will also have access to one-on-one HR meetings, which are optional. Employees on parental leave will be fully paid out, while those on visas or looking for new roles within the company will receive additional assistance.

Employees who are made redundant in Australia will be paid for their final three weeks but will not be expected to work during that time.

Atlassian Restructuring Costs Could Reach $174 Million

The cost of the layoff and other restructuring activities may go up to $174 million, according to Atlassian. The company is also planning to reduce the office space. This may result in exit costs of at least $62 million. The majority of the expenses are likely to be recorded by the end of March and will be payable by the end of June.

As part of the restructuring process, Atlassian announced that its chief technology officer, Rajeev Rajan, is stepping down at the end of March. Rajeev's responsibilities will be handled by Taroon Mandhana and Vikram Rao, who are described as "next generation AI talent."

Atlassian Revenue Growth Continues Despite Ongoing Losses

The majority of Atlassian's revenue is derived from subscription services for its widely used workplace software products, which include Jira, Confluence, and Trello. The company made a revenue of US$1.6 billion in the last quarter of 2025, a US$300 million increase from the previous year.

However, Atlassian has been unable to make a profit since 2017. In the last quarter of 2025, it made a net loss of US$42 million, a slight increase from the US$38 million it made a year ago. The news of Atlassian's restructuring was well-received by investors, with the company's shares going up by about 4% in after-hours trading on Nasdaq.

AI-Driven Layoffs Spread Across the Tech Industry

Other technology companies have also announced job cuts citing the effect of artificial intelligence on their workforce. Block, a fintech company that operates Afterpay, announced a 40% reduction in its workforce, reducing its total employees from 10,000 to fewer than 6,000 employees.

Block is a fintech company that operates Afterpay. The company’s co-founder, Jack Dorsey, mentioned that a result of improved productivity from artificial intelligence has "fundamentally" changed the company.

WiseTech Global, a logistics software company from Australia, announced that it will be cutting 2,000 jobs over two years, which is equivalent to 30% of its total workforce. Both companies had also witnessed a significant fall in their share prices over the past six months. The job cuts by both companies could be a result of more than one cause.