By Kelly Cloonan
Atlassian is cutting about 10% of its workforce in a move to adapt to the rise of artificial intelligence.
"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," Chief Executive Mike Cannon-Brookes said in a Wednesday blog post.
Cannon-Brookes said Atlassian's approach is not to replace people with AI, but to reshape its workforce's mix of skills to help it succeed as an AI-first company. The company focused on retaining strong performers, graduates and workers with transferable skills, he said.
The company said the cuts will allow it to invest further in AI and enterprise sales, as well as accelerate its path toward sustained profitability, as it looks to meet a higher bar for software companies when it comes to growth, profitability and speed.
Software companies have faced a flurry of concerns this year as rapidly improving AI models threaten to upend their businesses. The worries have set off jitters on Wall Street, sending software stocks down in recent weeks. Through the market's close Atlassian shares have slid 53% this year.
"We have momentum," Cannon-Brookes said. "But, things have changed."
Atlassian's layoffs amount to about 1,600 people, the company said. It employed 13,813 full-time employees as of June 30, according to its latest annual filing with the Securities and Exchange Commission.
The cuts follow a slew of AI-related layoffs in recent weeks. Block said last month it planned to slash 40% of its workforce, or more than 4,000 employees, and alluded to AI tools as the reason for the cuts. Pinterest recently said it was laying off nearly 15% of its workforce as part of a plan to focus more of its resources on AI-related roles.
Atlassian expects to incur $225 million to $236 million of charges in connection with the restructuring, a majority of which it expects will be tied to severance, notice period, employee transition and benefits payments, with the rest consisting of exit charges related to office space reductions.
The company expects to incur a majority of the charges in the third quarter of this fiscal year.
The company also backed its guidance for the current quarter, which ends March 31, and for the year ending June 30.
Write to Kelly Cloonan at kelly.cloonan@wsj.com
(END) Dow Jones Newswires
March 11, 2026 18:57 ET (22:57 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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