Job cuts at Atlassian revived the debate: should AI cut working hours, not headcount

After Atlassian's decision to cut 10% of employees, the conversation about how AI is changing the labor market has stopped being an abstract dispute about a distant future. Against the backdrop of a sharp increase in productivity among developers, the question is growing louder: why should the benefits of automation be taken only by companies and not by the workers themselves?

Why the debate returned

The trigger for a new wave of discussion was the layoffs at Atlassian — one of the most prominent players on Australia's software market. For the column's author, this is an important signal: the conversation about AI and jobs can no longer be conducted in the conditional mood. In the software industry, the effect is already visible in practice. Developers report significant productivity gains thanks to tools like Claude from Anthropic, and this changes not only the speed of code writing, but also the calculations of managers about how many people a team needs.

The problem, according to economist John Quiggin's logic, is that the dispute itself is usually framed too narrowly. If AI allows the same volume of tasks to be performed with less effort, business almost automatically considers two scenarios: increase profit or cut staff. Much less often discussed is the third option — reduce working time while maintaining employment. And this option, the author believes, was historically the normal response of society to productivity growth.

"In discussions about AI, it seems to be taken for granted that if the

total number of working hours falls, then someone is bound to lose their job."

How hours were cut before

Quiggin reminds us that anxiety about new technologies is not new. Even during the industrial revolution, mechanization did not initially free people; instead, it made labor harder: familiar forms of employment disappeared, and the working week for many reached almost 70 hours. The Luddites' protests were a reaction not to abstract progress, but to quite real deterioration in living and working conditions.

Later, the balance did begin to shift. In the second half of the 19th and 20th centuries, the benefits of technological progress began to be expressed not only in the growth of output and business income, but also in the gradual reduction of working time. Australia and New Zealand were among the first to advance the eight-hour working day, then the standard week decreased from 48 to 44 and then to 40 hours. Even today's familiar weekends were once the result of long struggles by workers, unions, and the state, not a gift from employers.

However, this process stalled. In Australia, the move to a 35-hour week was discussed in the 1980s, but it went no further. The working week became fixed at 38 hours, and the idea of further time reduction began to be seen not as the next logical step, but as something exotic. This is precisely why today's discussions about AI quickly descend into the topic of layoffs: the current standard seems natural and unchangeable.

Who gets the benefit

The author links this dispute not only to AI, but also to recent experience. The pandemic showed that work arrangements could change much faster than seemed possible before: millions of people almost instantly switched to remote work, and the system did not collapse. Moreover, after lockdowns were lifted, employers were unable to fully return the market to its previous rules. For office employees, this became proof that labor organization is a political and managerial choice, not a law of nature.

There are other signs of shift. In Australia, the right to disconnect from work messages outside standard hours appeared, and some employees have quietly, without official announcements, reclaimed their Friday afternoons. But such changes are distributed unevenly: those whose work requires physical presence — in retail, logistics, transport — get much less from the new flexibility.

• AI already provides measurable productivity gains in development.
• Without a new balance of power, this gain easily turns into layoffs and margin growth.
• Remote work proved that the familiar five-day schedule is not carved in stone.
• The right to disconnect became an attempt to protect personal time from the "creeping" expansion of the working day.
• A shorter week will not appear by itself — it requires unions, politics, and negotiations.

Against this backdrop, Quiggin criticizes authorities who are not ready to seriously discuss a four-day week and often, on the contrary, try to return more rigid control over office presence. His main thesis is simple: if AI really makes workers more productive, society should argue not only about how many people will be left without jobs, but also about how to share the freed-up time.

What this means

The layoffs at Atlassian became a convenient focal point for a big debate about AI and employment. If productivity growth is not translated into a shorter working week or other employee guarantees, the technological gain will once again settle into corporate profits, and for many, the talk of "efficiency" will mean only fewer colleagues and more uncertainty.