TL;DR

Atlassian is cutting roughly 1,600 employees — about 10% of its workforce — to fund further investment in AI and enterprise sales. CEO Mike Cannon-Brookes said AI “does” change the skills mix and the number of roles required in certain areas.

Self-Funding the AI Bet

The cuts come despite strong financial performance. Atlassian reported cloud revenue growth above 25%, recurring revenue obligations up over 40%, more than 600 customers paying over $1 million annually, and its AI product Rovo reaching 5 million monthly active users.

Cannon-Brookes framed the decision as proactive adaptation rather than crisis management. The company is restructuring to “self-fund further investment in AI and enterprise sales” while building dedicated leadership teams across its product portfolio and revenue-generating areas.

On whether AI is replacing the affected roles, the CEO was characteristically direct: “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.” He stressed the company’s approach is “people and AI” rather than outright replacement, but acknowledged this means reshaping the workforce.

Generous Exit Terms

Affected employees receive at minimum 16 weeks’ separation pay plus one week per year of service, pro-rated bonuses, a $1,000 technology payment, six months of extended healthcare, and continued access to mental health support. Slack access remains available for 6-12 hours for goodbyes.

A Growing Pattern

Atlassian joins a lengthening list of profitable tech companies cutting staff to redirect resources toward AI. The pattern — strong revenue, AI investment narrative, workforce reduction — has become familiar across the sector throughout 2025 and into 2026.

Looking Forward

For UK businesses using Atlassian products like Jira, Confluence and Trello, the pivot signals that AI features will become increasingly central to the platform experience. Rovo’s rapid growth to 5 million users suggests AI-assisted workflows are gaining traction faster than many enterprise software incumbents expected.