Atlassian Layoffs: The AI push that cut 1,600 jobs while executives insist “AI doesn’t replace people”

Atlassian layoffs will eliminate roughly 1, 600 positions—about 10% of the company’s workforce—as the software firm restructures to “self-fund” deeper investment in artificial intelligence and enterprise sales, while also replacing its chief technology officer.

What is being cut—and where are the Atlassian Layoffs landing?

Atlassian said the restructuring affects about 10% of its workforce, described as roughly 1, 600 positions. more than 900 of the affected roles were in software research and development—an especially sensitive area for a company whose workforce is heavily weighted toward building and designing software.

As of June 2025, Atlassian had 13, 813 full-time employees, and more than half worked in software engineering and design. The geographic breakdown of the affected roles, provided by a spokesperson, includes about 640 employees in North America, 480 in Australia, and 250 in India. The remaining affected staff are spread across Japan, the Philippines, Europe, the Middle East, and Africa.

Beyond headcount reductions, the company is also replacing its chief technology officer as part of the wider restructuring tied to artificial intelligence investment.

Is AI the reason for the atlassian layoffs—or the rationale?

In a note circulated to employees late Wednesday (US time), Atlassian co-founder Mike Cannon-Brookes called the move “the right decision for Atlassian, ” while acknowledging its impact. He wrote that the shift reflects how artificial intelligence changes the skills and roles the company needs, framing the restructuring as a way to strengthen financial standing and “self-fund further investment in AI and enterprise sales. ”

Cannon-Brookes addressed whether AI replaced the workers affected by the layoffs. “Our approach is not ‘AI replaces people’, ” he wrote. “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. ”

The tension is stark: atlassian layoffs are being executed amid a strategic pivot toward AI, even as leadership argues the company is not pursuing a simple substitution of technology for people. That distinction—between “AI replaces people” and AI-driven changes in the “number of roles required”—is now central to how employees, investors, and labor representatives interpret the decision.

Atlassian has also faced market pressure. The company has lost more than half its market value since the start of 2026, as traders fear AI could make its services obsolete. The share price decline has wiped more than half the net worth of the company’s Australian founders, Cannon-Brookes and Scott Farquhar.

Who is challenging the process, and what transparency is being demanded?

Professionals Australia, the union representing Atlassian workers, said impacted employees were informed on Thursday, with a consultation process expected to last until 19 March and final termination expected on 2 April. Paul Inglis, a director at Professionals Australia, said workers had been made redundant without consultation or any indication that a restructure would affect their jobs.

“These are experienced professionals who have helped build one of Australia’s most successful technology companies from the ground up, ” Inglis said. “They deserve respect, transparency and proper consultation when major decisions about their livelihoods and their future careers are made. ”

The union also said hundreds of Australian Atlassian workers had joined in order to seek a say in AI use in workplaces ahead of what the union described as a “devastating blow. ” A union spokesperson said Professionals Australia requested an urgent meeting to discuss Atlassian’s introduction of AI technology and its direct connection to redundancies. Atlassian declined to comment.

In a gesture aimed at employees processing the suddenness of the decision, Cannon-Brookes said Atlassian left its Slack work chat functions open for at least six hours longer than usual so employees could farewell colleagues.

For those departing, affected employees are expected to receive a minimum separation package of 16 weeks’ pay, extended healthcare plans, early pro rata bonuses, and a US$1, 000 “technology payment” after returning their company equipment.

The unresolved public-interest issue is not whether atlassian layoffs are legal or financially defensible—those questions cannot be answered from the company’s statements alone—but whether a restructuring explicitly tied to AI investment can be separated from worker claims that AI adoption and redundancy decisions are linked, and whether consultation and transparency were adequate given the scale and speed of the cuts.