Atlassian Cuts 1,600 Jobs as It Restructures Around AI

Atlassian just cut 1,600 jobs. About 10% of its entire workforce, gone in a single announcement. The company is also replacing its CTO, Rajeev Rajan, with two executives described as "next generation AI talent."

Not a Replacement, but a Reshaping

Co-founder Mike Cannon-Brookes framed it carefully in a note to employees: "Our approach is not AI replaces people. But it would be disingenuous to pretend AI does not change the mix of skills we need or the number of roles required in certain areas."

More than 900 of the affected positions were in software research and development. About 640 employees are in North America, 480 in Australia, and 250 in India. The restructuring costs are expected to hit $174 million, with office space reductions adding another $62 million.

The Market Pressure

Atlassian has lost more than half its market value since the start of 2026. Investors fear AI will make workflow tools like Jira, Confluence, and Trello obsolete, or at least commoditize them. The share price collapse has wiped out more than half the net worth of both Cannon-Brookes and co-founder Scott Farquhar.

The layoffs are meant to accelerate the company toward profitability while freeing up capital for AI investment. Investors responded positively, sending shares up 4% in extended trading.

A Pattern Forming

Atlassian is not alone. Block cut 40% of its global workforce weeks earlier, with Jack Dorsey citing AI-driven productivity gains. WiseTech announced 2,000 job cuts over two years. All three companies had seen their stock prices tank, and all pointed to AI as the reason for restructuring.

Whether AI is genuinely replacing these roles or providing convenient cover for cost-cutting is an open question. But the trend is unmistakable: enterprise software companies are reorganizing around AI, and thousands of engineers are paying the price.