He told staff that Atlassian is reinventing itself as an “AI-first company,” and while artificial intelligence won’t directly replace that role, it was a central catalyst for the change.
“We fundamentally believe that people and AI produce the best results,” he said.
“Our approach is not that ‘AI will replace humans,’ but it would be disingenuous to pretend that AI won’t change the mix of skills needed or the number of roles needed in a given field, which it does.”
“This is primarily about adaptation. We are rebuilding our skill mix and changing the way we approach building for the future.”
Affected staff will receive a global separation package of at least 16 weeks (an additional week for each year of service), a pro-rated bonus for 26 fiscal years, a US$1,000 ($1,693) technology stipend upon return of a company laptop, and an additional six months of medical coverage for affected employees and their families.
“We believe this is the right decision for Atlassian,” Cannon-Brookes said.
“But that doesn’t mean it’s easy. It’s never been easy. I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today.
“We are doing this to strengthen our financial profile while self-funding further investments in AI and enterprise sales. We are also changing the way we work and reorganizing around our operational systems to move faster.”
The reorganization is estimated to cost Atlassian up to $236 million, with most of that going toward severance costs and the rest going toward “exit costs associated with reduced office space.”
The company’s new A$1.45 billion ($1.75 billion) headquarters in Sydney is still under construction.
Cannonbrooks loses A$7.2 billion due to disaster
It all comes as Cannon Brookes, one of Australia’s richest men, lost almost half his net worth in a ferocious global tech stock sell-off sparked by fears that AI would make his company obsolete.
The environmental activist and net-zero advocate was worth A$14.9 billion last year alone, but now has a net worth of around A$7.7 billion as the share price of his company Atlassian continues to plummet.
He changed his tune this week, calling claims that AI will destroy his company “ridiculous.”
Atlassian is a leading Australian-American software company that creates products for software development, project management, and team collaboration.
The company has become a Nasdaq-listed tech giant with billions of dollars in revenue, but its stock price has plummeted almost 74% over the past 12 months.
One of the big factors driving this decline is the fear that AI will make traditional Software-as-a-Service (SaaS) companies like Atlassian obsolete.
In early February, companies like Anthropic and OpenAI released “AI agents” that can autonomously manage tasks and write code. Investors are concerned that these agents will replace human software developers, who are Atlassian’s primary users.
Atlassian also makes money based on the number of “seats” (users) companies pay for. For example, if a company uses AI to do the work of 10 people with just two people, Atlassian loses 80% of its revenue from that client.
Atlassian’s large enterprise customers may not need as many IT staff in the future, given that AI can now take on many of the roles of engineers, such as coding.
On the surface at least, Sydney-based Cannon-Brookes is still growing. The company reported adjusted net profit of US$320.9 million for the December quarter, up from US$255.6 million in the same period a year ago in December 2024. Total sales also increased by 23% to US$1.6 billion.
But investors are clearly unimpressed by the growth rate, spooked by predictions that growth will slow from 23% to the high teens. In the cutthroat world of Wall Street trading, any sign of slowdown can lead to massive declines.
Nevertheless, Cannon-Brooks told investors that he “couldn’t be more bullish” on the opportunities ahead, even as he relentlessly sells off his company’s stock every day.
In the month leading up to the earnings release, he continued to sell 7,665 shares each day at prices ranging from $161.11 per share on January 8 to $105.14 on February 4, according to the Knightly.
Cannon Brooks appeared on venture capitalist Harry Stebbings’ podcast 20VC this week and said claims that SaaS is dead are “ridiculous.”
“It seems like we’re some kind of cavemen who don’t understand large-scale language models, sitting around typing assembly code behind a rattling keyboard,” he says. “We’re not just adding AI capabilities, we’re building them.”
Atlassian freezes hiring
Amid falling stock prices and concerns about AI, Atlassian announced last month that it would stop hiring engineers and fill other related roles and scale back its global hiring efforts.
Desperate applicants claim they’ve been “ghosted” or had offers stolen from them at the 11th hour.
Job seekers caught up in the sudden hiring shutdown are venting their frustrations on social media and employee forums like Blind.
“I got it [engineering] Job Offer…After 3 weeks of silence, I finally messaged the recruiter on LinkedIn and was told there was a hiring freeze. [sic]” one person posted on the employee forum Blind.
Another post from last week said: “My interview was also canceled after 6 hours only to be told there are no more openings for the position. Very frustrating as I have been preparing for weeks.”
Atlassian employs more than 12,000 people and typically has hundreds of positions available. However, the company’s global job information site currently only lists 40 jobs in the sales department and 12 jobs for general interns and graduates.
Billionaire admits ‘deep internal conflict’ over private jet
Mr Cannon-Brookes is known as one of Australia’s wealthiest people, but he has also made a name for himself in politics by championing the move towards net zero.
But while ordinary Australians are being asked to make big changes, the 46-year-old decided to treat himself to a luxury new private jet late last year, admitting a “deep internal conflict” over carbon-intensive forms of transport.
Atlassian’s co-founder and CEO has purchased a Bombardier 7500 and plans to use it to move his vast business operations, including a minority stake in the Utah Jazz NBA team and a sponsorship deal with Formula One.
In a statement posted to LinkedIn, Cannon-Brookes confirmed the jet purchase and acknowledged that it would be a “carbon-intensive” method of travel.
“I do not deny that I have deep conflicts within myself regarding this matter,” he said.
“I bought the plane for several reasons.
“Personal safety is the main reason (an unfortunate reality of my world), but also so I can run a global business from Australia and always be a father.
“So this is a difficult and ongoing trade-off that I have made.
“While commercial aviation does not contribute significantly to global carbon emissions, it is a carbon-intensive mode of transportation.”
The Bombardier 7500 is powered by GE Passport engines, has a maximum range of 7700 nautical miles, a top Mach speed of 0.925, and can carry up to 19 passengers.
Cannon-Brookes said it would go “far beyond” carbon emissions with a “very stringent carbon regime” including direct air capture and the use of sustainable fuels.
“These options are not realistic for commercial aircraft, but they are viable in the civilian world,” he said.
“This means my flights actually have a net negative carbon footprint.
“My commitment to climate change is as strong as ever. I’m still very focused on making a big impact and reducing massive emissions through active investment and philanthropy…and I have the proud scars to prove it.”
He is a major investor in Suncable’s huge Australia-Asia Powerlink project, which hopes to supply energy to Singapore via an undersea power cable from solar farms in the Northern Territory.
Further in the future
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