Atlassian's 1,600 job cuts: CEO calls move ‘adaptation’, CTO Rajeev Rajan steps down

Australian software giant Atlassian will cut around 1,600 employees, roughly 10% of its global workforce, in one of the country’s most significant technology restructures of the artificial intelligence era, as the company pivots toward an “AI-first” strategy.

The Sydney-founded collaboration software maker confirmed the layoffs in a filing with US regulators and internal communications to staff on March 11, saying "Atlassian announced a restructuring that results in the elimination of certain roles, impacting approximately 10% of the Company’s workforce. These actions are intended to rebalance the Company to accelerate building the future of teamwork in the AI era. 

This includes self-funding further investment in key strategic priorities, such as AI and enterprise sales, reorganising its teams to move with more focus and speed across the Atlassian System of Work, and optimising for long-term operational efficiency and sustainability. Position eliminations in each country are subject to local law and consultation requirements."

Around 30% of the affected roles, roughly 480 to 500 positions, are based in Australia, with the remainder spread across the company’s global offices. Employees began receiving notification emails on Thursday and were told they would learn within about 20 minutes whether their roles had been eliminated or whether consultation processes would begin in their region.

CEO: restructuring about “adaptation,” not just cost cutting

Chief executive and co-founder Mike Cannon-Brookes described the move as one of the toughest decisions in the company’s 23-year history, acknowledging the impact on staff while arguing that rapid advances in AI are reshaping the skills the business requires.

In a video and written message to employees, Cannon-Brookes said artificial intelligence is changing both the nature of work and the number of employees needed in certain areas of the company. While rejecting the idea that the firm is simply replacing workers with machines, he acknowledged that it would be unrealistic to ignore how advanced AI tools are transforming staffing needs.

More than 100 company leaders and HR specialists were involved in determining which roles would be eliminated, with the process focused on retaining employees whose skills are directly tied to AI or can be adapted to emerging technologies. The restructure affects teams across the organisation as Atlassian reorganises around what it calls its “system of work” to accelerate product development for an AI-driven workplace.

The company says the layoffs will effectively fund its next phase of growth. By reducing headcount, Atlassian expects to free up hundreds of millions of dollars to invest in AI capabilities, infrastructure and sales teams targeting large enterprise customers, while also responding to investor pressure for stronger margins.

Severance packages and restructuring costs

The layoffs are expected to cost Atlassian between US$225 million and US$236 million in restructuring charges, largely recorded in the current quarter. These costs include severance payments and expenses tied to reducing office space, even as construction continues on the company’s A$1.45 billion headquarters at Sydney’s Central Station technology precinct.

Employees impacted by the layoffs will receive a minimum of 16 weeks’ pay, plus an additional week of salary for each year of service. The package also includes prorated bonuses for the 2026 financial year, six months of extended health coverage for eligible staff and their families, and a US$1,000 technology stipend once corporate devices are returned.

Cannon-Brookes also encouraged remaining employees to support departing colleagues and announced a company-wide town hall meeting next week to address questions about the restructuring. Departing staff will temporarily retain access to the company’s workplace messaging platform so they can say goodbye to colleagues and exchange contact details.

Part of a wider AI-driven workforce shift

Atlassian’s announcement adds to a growing wave of technology sector layoffs linked to AI-led restructuring. Companies across the industry are reassessing staffing levels as automation tools reshape how software products are built, sold and supported.

Firms including Block Inc., WiseTech Global, Amazon, Pinterest and CrowdStrike have all announced job cuts or organisational overhauls tied to artificial intelligence strategies in recent months.

Executives speaking at gatherings such as the World Economic Forum Annual Meeting have repeatedly argued that AI will ultimately create new roles even as it eliminates others. Yet the pace of restructuring has also fuelled debate about whether companies are using AI as a justification to accelerate layoffs while pursuing leaner operating models.

At Atlassian, the cuts follow a sudden hiring freeze last month that saw engineering interviews cancelled and job offers withdrawn as the company reassessed its workforce requirements. Prospective candidates later complained on online forums that recruitment processes had been abruptly halted after weeks of interviews.

The overhaul also coincides with leadership changes in the company’s technology organisation. Chief technology officer Rajeev Rajan is set to step down at the end of March after nearly four years in the role. The company plans to replace the position with two separate CTO roles — one focused on its “Teamwork” products and another overseeing enterprise, trust and the company’s expanding AI roadmap.

For the global tech sector, Atlassian’s decision underscores a growing reality of the AI transition: alongside new innovation and productivity gains, companies are confronting difficult trade-offs as they reshape their workforces for an AI-driven future.