Atlassian said Wednesday it will eliminate about 10% of its workforce, or roughly 1,600 jobs, as the software maker restructures to fund more investment in artificial intelligence and enterprise sales after a sharp decline in its share price.
Chief executive Mike Cannon-Brookes said in a blog post the company is aiming to “self-fund” additional spending on AI and go-to-market efforts while improving its financial profile. Employees will be informed of their status by email, he said.
Costs and Timeline
The layoffs are expected to generate $225 million to $236 million in charges, Atlassian said in a filing. The company expects the process to be largely completed by the end of June.
Shares rose about 1% in extended trading following the announcement.
AI Pressure and Product Push
Atlassian, based in Sydney, has lost more than half its market value this year, part of a broader selloff in software stocks tied to investor concerns that generative AI tools could erode demand for traditional software. The company’s stock is down about 84% from its 2021 peak.
The maker of Jira has been expanding its Rovo AI features. In February, the company reported about 5 million monthly users for Rovo and said revenue growth has accelerated over the past three quarters. Atlassian includes Rovo credits in some subscriptions.
“Not Replacing Employees,” But Roles Are Shifting
Cannon-Brookes said the restructuring is not framed as AI directly replacing workers, but he added that AI is changing the mix of skills Atlassian needs and the number of roles in certain areas.
“This is primarily about adaptation,” he wrote, describing a shift in how the company works as it tries to build for the future and accelerate a path toward sustained profitability. Atlassian has reported losses in every fiscal year since 2017, he said.
The announcement follows earlier workforce reductions. In 2023, Atlassian cut about 500 employees, roughly 5% of headcount.
