Atlassian layoffs: 10% of total staff to be affected in AI pivot; 16% of those impacted are in India

Software company Atlassian on Wednesday said it would lay off roughly 10% of its workforce, or 1,600 employees, as it shifts focus toward artificial intelligence and enterprise sales.

A report by Reuters said that most affected employees are in North America (40%), followed by Australia (30%) and India (16%). The company expects the layoffs and office space reductions to cost between $225 million and $236 million.

In a memo to employees, CEO Mike Cannon-Brookes said, "Our approach is not 'AI ⁠replaces people.' ‌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. It ⁠does."


The CEO added, “This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future.”

Among those leaving the company is chief technology officer Rajeev Rajan, who will step down by March 31.

Atlassian shares closed down 3.2% at $75.4 on the Nasdaq on Wednesday, as the company outlined plans to "rebalance" resources and focus on the "future of teamwork in the AI era." The restructuring is expected to be largely complete by the end of the fourth quarter, with fewer cuts anticipated in Europe, the Middle East, Africa, Japan, and the Philippines.

The move comes amid growing investor concern that AI could disrupt traditional software business models, though some analysts say last month’s software sector selloff may have been an overreaction.

Support for affected employees

The company said it will provide support to impacted staff in consultation with employee representative bodies and local laws.

Measures include:

• A minimum 16-week global separation package, with an additional week for each year of service, and prorated FY26 bonuses brought forward.
• A $1,000 technology payment (upon returning corporate laptops).
• Extension of healthcare plans for six months for eligible employees and their families.
• Optional one-on-one calls with HR, as well as continued access to Modern Health and the Employee Assistance Program (EAP).
• Additional support, including guidance for internal mobility, outplacement services, individual assistance for visa holders, and full payout of future-dated paid parental leave.