Atlassian Cuts 1,600 Jobs as AI Forces Australia's Tech Giant to Shrink

Atlassian announced on Tuesday that it will cut 1,600 jobs from its global workforce, roughly 10% of its 16,000 employees. The company said the reductions will allow it to redirect resources toward artificial intelligence development.

Of the cuts, 480 positions are in Australia, where Atlassian is headquartered alongside a legal listing in Delaware. Another 640 roles will go in North America and 250 in India. More than 900 of the affected positions were in software research and development.

The unit economics of the decision

The restructure tells you something about where the company thinks value sits. Atlassian's Rovo AI product now has 5 million monthly active users. Cloud revenue grew more than 25% last quarter. But the share price has collapsed from $221 to $75.45 over twelve months, erasing two-thirds of the company's market value.

That collapse reflects investor concern that AI will make Atlassian's core products obsolete. The same tools that let teams collaborate through Jira and Confluence can increasingly be replaced by AI agents that automate project management and documentation directly.

We fundamentally believe people and AI create the best outcomes. 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.

— Atlassian company statement

The company has not turned a profit in a decade. Its most recent quarter showed a net loss of $42.6 million. The restructure will cost between $174 million and $236 million in redundancy payments, plus at least $62 million to exit office space.

How workers learned

Staff received a video message from co-founder Mike Cannon-Brookes before individual emails confirmed their status. The entire process took about 20 minutes. Consultation will continue until March 19, with final terminations expected by April 2.

Slack channels stayed open for six to twelve hours after the announcement to allow farewells. Confluence access was restricted immediately, which the company attributed to protecting customer data.

Separation packages include minimum 16 weeks pay plus one week per year of service, six months of healthcare extension, a $1,000 technology payment, and prorated bonuses for the current financial year.

The selection criteria problem

Multiple affected workers reported confusion about how decisions were made. One employee who had exceeded expectations in their most recent performance review was let go while newly hired colleagues with less than three months tenure remained.

I thought I was making impact. I just didn't think they gave me enough chance to really prove myself.

— Affected Atlassian employee of four months

Professionals Australia, the union representing some workers, has requested an urgent meeting with the company. Director Paul Inglis said the affected staff are experienced professionals who helped build one of Australia's most successful technology companies.

The leadership reshuffle

Chief Technology Officer Rajeev Rajan is departing. He will be replaced by two executives: Taroon Mandhana and Vikram Rao, whom the company described as next-generation AI talent.

The CTO change signals where Atlassian sees its future. The company spent $1 billion acquiring DX, a developer intelligence platform, and $610 million on The Browser Company, which builds AI-based web browsers. Both acquisitions closed in the past year.

The broader pattern

Atlassian is not alone. Block, the parent company of Afterpay and Square, cut 40% of its workforce in late February. WiseTech Global announced 2,000 job reductions over two years, representing 30% of its workforce.

Each company cited AI as a factor. Each saw its stock rise on the news. The market is rewarding efficiency gains even when the human cost is substantial.

Adam Barty, CEO of consulting firm Revium, offered a blunter assessment. Atlassian has never been profitable, and AI represents an existential threat to its business model. The cuts look defensive rather than strategic.

What happens to Atlassian Central

The company's 38-storey headquarters next to Sydney's Central Station remains under construction. The building is zoned for mixed use, which allows subletting. Whether Atlassian will need all of it is now an open question.