Australian software giant Atlassian plans to cut around 1,600 jobs in a major restructuring in response to the rise of artificial intelligence.
The company announced that approximately 10% of its positions will be retiring. We have approximately 16,000 employees worldwide.
“We have made the very difficult decision to reduce the size of our team by up to 10%,” CEO Mike Cannon-Brooks said in an email to all staff 20 minutes before employees who lost their jobs were notified via email.
“We are doing this to self-fund further investments in AI and enterprise sales while strengthening our financial profile. We are also changing the way we work and reorganizing around our operational systems to move faster,” he told them.
Cannon-Brookes said “things have changed” in the age of AI.
“The bar for what is ‘great’ for software companies is rising in terms of growth, profitability, speed, and value creation,” he said.
“We are choosing to adapt. Thoughtfully, decisively and quickly. To drive sustainable and profitable growth.”
The co-founder and CEO said this is not an “AI replacing people” approach.
“But it would be disingenuous to pretend that AI won’t change the mix of skills we need or the number of roles we need in a given field. In fact, it does.”
“This is primarily about adaptation. We are rebuilding our skill mix and changing the way we approach building for the future.”
Stock prices soar
Atlassian estimates that the restructuring will cost approximately $225 million to $236 million, including $169 million to $174 million in employee severance benefits and $56 million to $62 million in exit costs due to reduced office space.
Although Cannon-Brookes painted a strong growth story in the loss-making company’s latest second-quarter results, Atlassian’s stock price has tumbled over the past year, dropping by two-thirds and 50% in 2026, shrinking the company’s market capitalization to less than $20 billion, making it worth less than privately held Canva.
Atlassian’s stock price rose about 2% in after-hours trading following the announcement.
Billions of dollars were also wiped from the personal fortunes of co-founder Cannon Brooks and Technology Council of Australia chairman Scott Farquhar.
But Atlassian isn’t the only company caught up in what’s being called an AI-driven “SaaSpocalypse.”
Last month, Sydney-based logistics software company WiseTech Global announced it would cut 2,000 jobs, nearly a third of its global workforce across 40 countries, as part of a two-year AI-powered restructuring. The Commonwealth Bank on the same day cut 300 technology roles, and days later the global fintech bloc announced it would cut its workforce by 40%, cutting 4,000 jobs.
