Atlassian, the software company behind Jira, Confluence, and Trello, announced it will lay off around 1,600 employees, roughly 10% of its global workforce, as part of a major restructuring to focus on artificial intelligence (AI).
CEO Mike Cannon-Brookes told employees that AI is transforming the way the company builds and sells products. While AI is not directly replacing people, the shift means the company needs different skills and roles to develop AI-driven tools for businesses. The layoffs are meant to realign resources toward AI and enterprise-focused products.
The company expects the restructuring to cost $225 million to $236 million, including severance and office-related expenses, mostly in the current fiscal quarter. The cuts affect employees worldwide, with about 40% in North America, 30% in Australia, and 16% in India. In addition, Chief Technology Officer Rajeev Rajan will step down on March 31, with new leadership overseeing the AI strategy.
Investors reacted positively, with Atlassian shares rising nearly 2% in after-hours trading, as the move is seen as a step toward a leaner, more focused company. However, analysts caution that layoffs alone may not solve bigger challenges, such as profitability and adapting existing products to the AI era.
Atlassian emphasized that the layoffs are not a reflection of performance but a strategic shift to prepare for the AI-driven future.
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