Atlassian announced on Wednesday that it is eliminating around 1,600 positions, equivalent to 10% of its global headcount, in a restructuring the company describes as necessary to compete in what it calls the AI era. The cuts will be self-funded, with savings redirected into AI development and a push upmarket into enterprise sales.
The scale of the reduction is significant. Software engineering and design account for more than half of Atlassian's 13,813 full-time employees as of June 2025, and more than 900 of the affected roles sit within software research and development. The company is also replacing its chief technology officer, signalling a leadership reset alongside the headcount reduction.
Atlassian's decision mirrors moves by other technology firms, including Block, that have cited AI-driven productivity gains as justification for workforce reductions. The framing — that fewer engineers are needed because AI can absorb more of the development workload — is becoming a recurring theme across the sector, though it remains contested by those laid off.
Employee reaction has been sharp. Staff cited a lack of communication and what one outlet quoted as "zero visibility" ahead of the announcement. The Guardian described the cuts as a "devastating blow" to affected workers.
Atlassian, co-founded by Australian billionaires Mike Cannon-Brookes and Scott Farquhar, produces collaboration and project management software including Jira and Confluence. The company has been navigating a transition from its traditional mid-market customer base toward larger enterprise clients, a shift that requires a different sales and engineering profile.
