Australian collaborationware company Atlassian has announced it will shed ten percent of staff – around 1,600 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. It does,” wrote CEO Mike Cannon-Brookes. “This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future.”
The CEO said Atlassian decided on the job cuts “to self-fund further investment in AI and enterprise sales, while strengthening our financial profile” and because the company is “changing the way we work and reorganising around our System of Work to move faster.”
Market pressures also influenced the decision.
“The bar for what ‘great’ looks like for software companies – on growth, on profitability, on speed, on value creation – has gone up,” Cannon-Brookes wrote.
Atlassian has done poorly at value creation in recent years: The company’s market capitalization peaked around $112 billion in 2021, but fell to around $30 billion in early 2023. A rally in February 2025 faded and the company’s stock ended Wednesday trading at around $75 apiece, giving it a market value just north of $20 billion – then popped slightly to $78 in after-hours trading following Cannon-Brookes’ announcement. But even those gains left the stock short of the $81 per share buyers were willing to pay earlier this week. The company has also prioritized re-investing profits, meaning it rarely records profits using the GAAP accounting system.
Those numbers have seen pundits include Atlassian in the list of companies felt to be threatened by the “SaaSpocalypse” – the theoretical imminent collapse of SaaS companies due to organizations replacing them with vibe-coded tools.
Cannon-Brookes put a different spin on the company’s position.
“We have momentum,” he wrote. “We are executing incredibly well across our AI, Enterprise and System of Work transformations,” and pointed to over 25 percent growth in revenue from cloud products, 40 percent-plus growth in remaining performance obligations, securing 600 customers who spend over $1 million a year, and winning more than five million users for the company’s new “Rovo” AI suite.
The CEO also described the layoffs as necessary to adapt to market conditions.
“We’ve navigated – and thrived through – multiple technology shifts. Multiple market cycles. And we will again,” he wrote. “This will require continual adaptation. Decisiveness. And making hard decisions to set Atlassian up strongly for the long term.”
One of Atlassian’s company values is “Build with heart and balance,” and Cannon-Brookes said these layoffs express those words.
“Decisions require heart (humanity, empathy, passion), and balance (pragmatism, trade-offs, decisiveness),” he wrote. “In this moment, we are balancing making the right (hard) decision for Atlassian."
In a video message, the CEO told departing staff “I am deeply sorry for the disruption this creates in your life.”
That disruption was likely sudden and surprising, as Atlassian sent every worker an email informing them of their fate within 20 minutes of the CEO’s announcement.
The company is being generous to departing staff, paying 16 weeks of wages plus another week for each year of service, plus bonuses on a pro-rata basis. Workers who have booked parental leave will be paid for it in advance. Every departing worker will receive a $1,000 “technology stipend” after they hand in company laptops.
But the end will be swift, with departing employees losing access to Slack within 12 hours. The company also advised it will restrict access to internal Confluence resources “in service of protecting our customers’ data.”
In his video message, Cannon-Brookes urged to staff to “be kind to yourselves and others [and] check in on your teammates,” and told departing workers you are an important part of the Atlassian story.”
The company said similar things after laying off 500 staff in 2023. ®
Source: The register