Atlassian to cut 1,600 jobs and replace its CTO to speed up its AI strategy

Atlassian has announced its biggest restructuring in recent years: the company will cut about 1,600 employees, roughly 10% of its staff, and replace its technical leadership at the same time. Officially, this is not just about saving money but about reallocating resources toward AI and enterprise sales.

Scale of the cuts

Employees in several regions are affected. The company said about 640 of the affected roles are in North America, 480 in Australia and 250 in India, with the rest spread across Europe, Japan, the Philippines, the Middle East and Africa.

The hardest hit are product and engineering teams: more than 900 positions are tied to development and research. For Atlassian this is a particularly visible move, because most of its workforce has traditionally been concentrated in development and product design. As of June 2025 the company had 13,813 full-time employees, and more than half worked in technical roles.

The union Professionals Australia called the move a heavy blow and said employees did not receive proper consultation before the restructuring was announced.

Why the pivot

In a letter to employees, co-founder and CEO Mike Cannon-Brookes said plainly that the company wants to self-fund further investment in AI and enterprise sales while strengthening the financial profile of the business. In the same overhaul, Atlassian is eliminating the standalone CTO role: Rajeev Rajan will leave at the end of March, and his duties will be split between Tarun Mandhana and Vikram Rao, managers the company calls a new generation of AI leaders.

"Our approach is not that AI replaces people."

But right after that line, Atlassian adds a harder message: artificial intelligence changes the mix of skills needed and reduces demand for some roles.

This fits the company's current numbers. In February it reported quarterly revenue of $1.586 billion, cloud revenue growth of 26% year over year and more than 5 million monthly active Rovo users. Under GAAP, however, Atlassian is still unprofitable: its net loss for the quarter was $42.6 million.

After the news, the shares rose about 4% in extended trading, although the company has lost more than half its market value since the start of 2026.

What employees will get

The company promises a support package above the minimum requirements in various countries. According to the official statement, Atlassian is setting aside $225 million to $236 million for layoffs and related costs, including payouts, transition compensation and reduced office space.

• at least 16 weeks of severance plus one more week for each year of service
• early payout of the prorated portion of bonuses for fiscal year 2026
• $1,000 for equipment after the corporate laptop is returned
• six months of extended health coverage for eligible employees and their families
• separate help for people on visas, with finding a new role inside the company and with external job searches

The company also promised to keep Slack open for several hours so laid-off employees can say goodbye to their teams, and to hold mandatory consultations under local labor law in a number of markets. In practice, this means some decisions have already been made, while others still have to go through formal procedures before the final dismissal.

What this means

Atlassian shows how the logic of large SaaS businesses is changing in 2026: even with revenue growing, the company is ready to cut engineering teams first if it believes the next stage of competition will center on AI features, enterprise sales and speed of shipping products.

For the market, it is one more signal that the phrase "AI does not replace people" increasingly goes hand in hand with very real layoffs.