Atlassian is laying off about 1,600 employees — roughly 10% of its global headcount — in a restructuring the company says is needed to self-fund AI development and expand enterprise sales. Developers and software roles take the bulk of the cuts: approximately 640 positions in North America, 480 in Australia, and 250 in India. CTO Rajeev Rajan is leaving at the end of March. The company put severance and related costs at $225–$236 million in an SEC filing.
In a blog post announcing the layoffs, CEO Mike Cannon-Brookes drew a line between using AI to replace workers and restructuring a workforce around AI — a distinction that is becoming increasingly difficult to sustain. He wrote that Atlassian doesn't believe in replacing people with AI, then followed that with an acknowledgment that "AI does change the mix of skills we need or the number of roles required in certain areas." For the 1,600 employees losing their jobs, the practical difference is hard to identify.
The cuts come as Atlassian's stock has dropped more than 50% year-to-date in 2026, falling from highs above $450 in 2021 to around $75. The selloff reflects a broader investor concern about the per-seat SaaS model: if AI agents shrink headcount at client companies while also making custom software easier to build, demand for tools like Jira and Confluence faces pressure on both sides.
Atlassian is countering that read with numbers from its own AI products. The company reported 25% cloud revenue growth last quarter and says Rovo, its AI productivity tool embedded in Jira and Confluence, has 5 million monthly active users. The argument being made to investors is that the company can become an AI-native platform rather than a victim of one. That case is complicated by the company's finances — Atlassian has not posted a profit since 2017, which means the workforce reductions are partly a balance sheet decision, not just a strategic one.
The episode is not unique. Across enterprise software, companies are pouring money into AI features that could ultimately erode the pricing structures those products depend on, while simultaneously cutting costs to buy time for the bet to pay off.