Atlassian Cuts 1,600 Jobs to Fund AI Push as Stock Craters

Atlassian corporate office with lights dimming symbolizing layoffs and AI transition

Atlassian Slashes 10% of Its Workforce

Atlassian, the company behind Jira and Confluence, is laying off 1,600 employees — roughly 10% of its global workforce. CEO Mike Cannon-Brookes framed the cuts as a way to “self-fund further investment in AI and enterprise sales” while strengthening the company’s financial profile.

Where the Cuts Fall

The layoffs hit hardest in North America, which accounts for about 40% of affected roles. Australia takes roughly 30%, and India bears about 16% of the cuts. Notably, over 900 of the 1,600 positions are in software research and development — the very teams that build Atlassian’s products.

CTO Rajeev Rajan is also stepping down effective March 31, 2026, after nearly four years in the role. That’s a significant leadership change happening simultaneously with a massive restructuring.

The Cost of Cutting

Atlassian expects to spend up to $236 million on the layoffs, covering severance, benefits, and office space reductions. Affected employees get a minimum 16-week separation package, one additional week per year of service, a prorated FY26 bonus, a $1,000 technology payment, and six months of extended healthcare coverage.

Stock in Free Fall

Atlassian shares have lost more than half their value this year, caught in the broader software selloff triggered by AI disruption fears. The layoff announcement sent shares tumbling further, with investors apparently unconvinced that cutting humans to fund AI is the path back to growth.

The Bottom Line

The “we’re cutting jobs to invest in AI” playbook is becoming the tech industry’s favorite excuse for layoffs. Atlassian is firing over 900 R&D engineers to fund AI development — which is essentially saying “we’re replacing the people who build our products with the technology that might eventually build our products.” The stock has cratered 50%+ this year, the CTO is leaving, and the company is burning $236 million on severance. This isn’t a confident pivot to AI — it’s a company under pressure doing what every other struggling tech firm is doing: blame AI for the layoffs and hope investors buy it.