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Software giant Atlassian is cutting roughly 1,600 jobs – about 10% of its workforce – as part of a broader restructuring to strengthen its investment in AI.
Most of the affected roles are in North America (40%), Australia (30%), and India (16%), with smaller numbers located across EMEA, Japan, and the Philippines, a spokesperson told LeadDev.
The majority of Atlassian’s employees work in software engineering and design, accounting for over 50% of its 13,813 full-time workforce, according to data from June 2025.
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AI reshapes tech skills
Announcing the cuts, Atlassian co-founder Mike Cannon-Brookes stated that, while AI is not replacing people, 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.”
The layoffs are therefore “primarily about adaptation,” Cannon-Brookes said. “We are reshaping our skill mix and changing how we work to build for the future.”
Atlassian declined to comment further on the reasoning behind the layoffs.
The implication is that leaner teams accelerated by working with AI will achieve more than larger teams without AI acceleration, Jeff Watkins, chief AI officer of Leeds-based AI consultancy NorthStar Intelligence, told LeadDev. “Different kinds of skills are increasingly important, such as research methods, decision-making, critical thinking, and cross-disciplinary problem-solving.”
AI-driven layoffs across tech
This trend is starting to play out across the industry, with leaders openly linking layoffs to the rise of AI and changes in how companies operate.
Fintech firm Block abruptly cut 40% of its workforce in February, resulting in roughly 4,000 employees losing their jobs overnight.
Jack Dorsey CEO explained that the layoffs weren’t caused by company problems but by changes in how work is done. He highlighted that AI, combined with smaller, flatter teams, is creating a new approach to running and building a company.
Dorsey also warned that other tech firms may follow suit: “Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes.”
