The Australian-American proprietary software company Atlassian, developers of Jira, Trello and Confluence, has announced restructuring plans that will affect 1,600 employees across multiple regions and business units, including engineering, product, and business operations.  

The layoffs are expected to help fund investment in new areas, particularly AI and building tools that support teamwork and collaboration.

“We fundamentally believe people and AI create the best outcomes,” Mr Cannon-Brookes said in a post accompanying a pre-recorded video he shared with staff upon announcing the news.

“But it would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas.”

Atlassian’s share price dropped 66% over the last 12 months. However, following the announcement of the redundancies, the company’s share price began to increase modestly.

The restructuring includes leadership changes, with chief technology officer Rajeev Rajan confirmed to be stepping down from his position. 

 Taroon Mandhana will become chief technology officer for Teamwork, while Vikram Rao will serve as chief technology officer for Enterprise and chief trust officer, overseeing the organisation’s technology and AI roadmap.

Atlassian has announced that affected staff will receive severance packages which include a minimum separation payment equal to 16 weeks of pay, plus an additional week’s pay for each year of service with the company. Healthcare coverage will continue for six months for eligible employees, and each affected worker will also receive a $1,000 technology payment to support their transition after the layoffs.

Atlassian anticipates the restructuring will cost between $225 million and $236 million.

Recommended reading

• Report: More than Half of Firms Regret Cutting Jobs for AI
• Amazon Targets UK AI Skills Gap with New Training Push
• AI Has Moved From Experimentation to Execution in Enterprise IT

The announcement mirrors other high profile cases, such as those involving Sky, Amazon and Microsoft, seen in the last 12 months amid a rapidly changing digital landscape. Concerns continue to grow among young professionals who fear that AI may have drastic effects on their career prospects. 

Although some reports suggest that AI is not yet mature enough to justify major workforce cuts, some organisations are already taking action.

Atlassian chief executive, Mike Cannon-Brooks stated: “We are doing this to self-fund further investment in AI and enterprise sales, while strengthening our financial profile. We’re also changing the way we work and reorganising around our system of work to move faster.”

The restructuring is expected to be completed by the end of 2026.