Atlassian to Cut 1,600 Jobs in AI-Focused Restructuring

Atlassian announced it will lay off about 1,600 workers, roughly 10% of its workforce, as part of a restructuring to invest in AI and enterprise sales, and will replace its CTO with two executives described as next generation AI talent.

Atlassian has announced it is cutting approximately 1,600 positions, about 10% of its workforce, as part of a restructuring aimed at increasing investment in artificial intelligence and enterprise sales. The layoffs were announced on March 11, 2026, in a note from CEO Mike Cannon-Brookes to employees.

Scale and Distribution of Cuts

More than 900 of the affected roles are in software research and development, according to a spokesperson. About 640 affected employees are in North America, 480 in Australia, and 250 in India, with the remainder spread across Japan, the Philippines, Europe, the Middle East, and Africa. Atlassian's full-time workforce stood at 13,813 as of June 2025, with software engineering and design accounting for over 50% of employees.

Stated Rationale

Cannon-Brookes told employees the decision was the right one for Atlassian, while acknowledging the impact on those leaving. He indicated that AI use has changed the skills and roles the company needs, allowing a restructure to strengthen its financial position and self-fund further investment in AI and enterprise sales. He stated that the company's approach is not that AI replaces people, but added that it would be disingenuous to pretend AI does not change the mix of skills needed or the number of roles required in certain areas. The restructuring is intended to accelerate building the future of teamwork in the AI era and improve long-term operational efficiency.

Leadership Changes

As part of the restructure, Atlassian's chief technology officer, Rajeev Rajan, will step down at the end of March 2026. He will be replaced jointly by Taroon Mandhana and Vikram Rao, described as next generation AI talent. Mandhana becomes CTO Teamwork, while Rao takes on the role of CTO Enterprise and Chief Trust Officer.

Severance and Costs

Affected employees will receive a minimum separation package of 16 weeks' pay, with additional weeks based on tenure, extended healthcare plans, early pro rata bonuses, and a US$1,000 technology payment once they return their corporate laptop. Outplacement support is also provided. Atlassian left its Slack work chat functions open for at least six hours longer than usual, and on mobile devices for 6 to 12 hours depending on time zone, to allow employees to farewell colleagues, while Confluence access was restricted to protect customer data.

The company expects redundancies and related costs to total up to $174m (A$246m), while office space reductions will involve exit charges of at least $62m (A$87m). Most costs will be incurred from April to June and paid by the end of September. According to an SEC filing, total charges tied to the move are expected to be between $225 million and $236 million, with about $169 million to $174 million for severance, notice period, employee transition, and benefits payments, and another $56 million to $62 million for office space reductions.

Market Context

Atlassian has lost more than half its market value since the start of 2026, as traders fear AI will make the software company's services obsolete. The share price plunge has wiped more than half the net worth of the company's Australian founders, Cannon-Brookes and Scott Farquhar. Shares rose more than 4% in extended trading on the Nasdaq following the announcement.

The layoffs come weeks after similar cuts attributed to AI by Block, the owner of Afterpay, and Australian technology firm WiseTech. Block cut 40% of its global workforce, from 10,000 to under 6,000, with cofounder Jack Dorsey saying improvements in productivity due to AI had fundamentally changed the company. WiseTech announced it would cut 2,000 jobs over two years, about 30% of its workforce. Both companies had seen their share prices plunge over the preceding six months, and analysts have suggested each had reason to cut headcount other than AI use alone.