Atlassian just laid off 1,600 people, called it an “AI investment,” and its stock price went up.
The Australian company announced on March 11 that it will cut about 10% of its global workforce, or roughly 1,600 jobs, as it restructures to fund a push into artificial intelligence and enterprise sales. Soon after the news dropped, Atlassian shares rose nearly 2% in extended trading.
CEO and co-founder Mike Cannon-Brookes shared the news in a blog post, saying the company decided to “self-fund further investment in AI and enterprise sales, while strengthening our financial profile.”
“We’re also changing the way we work and reorganising around our System of Work to move faster,” he wrote.
In a loom video recording shared in the post, he acknowledged it was a very tough day and said the decision was not made lightly. He noted the real consequences for those impacted, as well as the uncertainty that those not impacted might be feeling.
“I believe it is the right decision for Atlassian’s long-term health,” he said.
He added, “We are focused on moving faster, staying disciplined on cost, and proving that we can grow profitably over the long term by staying responsive to the world we have to operate in.”
Atlassian also confirmed that Chief Technology Officer Rajeev Rajan will step down effective March 31, with two executives, Taroon Mandhana and Vikram Rao, splitting the responsibilities going forward.
Most impacted employees are in North America, accounting for 40% of the cuts, followed by 30% in Australia and 16% in India.
The company said the restructuring will result in charges of $225 million to $236 million, expected to cover severance, notice-period payments, and office space reductions. The restructuring is expected to be completed by the end of the fourth quarter of fiscal year 2026.
Job cuts even when numbers are strong
What makes Atlassian’s layoffs striking is that they come from a position of strength rather than crisis. Cannon-Brookes said, “We have momentum,” noting that the Rovo AI assistant recently surpassed 5 million monthly active users. He also highlighted strong results, including cloud revenue growth above 25%+, RPO growth of 40%+, and 600+ $1m ARR customers.
He was also direct about why growth alone is no longer enough:
“The bar for what ‘great’ looks like for software companies — on growth, on profitability, on speed, on value creation — has gone up,” he wrote.
He was equally clear about AI’s role in reshaping headcount:
“Our approach is not ‘AI replaces 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.”
A pattern the industry can no longer ignore
Atlassian is not operating in isolation. Data from Layoffs.fyi shows that up to 60 tech companies have cut more than 38,000 jobs in 2026 alone, with AI consistently cited as a significant reason.
Just a few weeks ago, Block CEO Jack Dorsey cut nearly 40% of his workforce, citing AI as a primary reason. AI-related job cuts pushed 2025 US layoffs past 1 million, and 2026 seems on track to continue the trend.
One uncomfortable truth emerging from companies like Atlassian, Block, Salesforce, and others is that AI is not just reshaping what work looks like. It is actively reducing the headcount needed to do it. For the 1,600 Atlassians who received that email on Wednesday, the shift to an AI-first strategy is not abstract. It is a pink slip.
For more on the tech layoff wave, read our coverage of Amazon’s recent decision to cut 16,000 jobs as the company restructures and trims bureaucracy across its global workforce.
