In October 2025, Atlassian’s co-founder and CEO, Mike Cannon-Brookes, stated on the 20VC podcast that technology creation is not limited by output. He projected that Atlassian would employ more engineers in five years who would become more efficient.
On March 11, 2026, Cannon-Brookes announced in a memo that 1,600 layoffs, or about 10% of the workforce, were necessary due to the AI era adaptation. The company’s stock had lost over half its value since January, amid a sector-wide downturn traders termed the ‘SaaSpocalypse,’ driven by concerns that AI might render SaaS tools obsolete.
The memo justified the layoffs as a step towards future investments in AI and enterprise sales while improving Atlassian’s financial standing. Cannon-Brookes clarified the plan was not to replace people with AI, but to adapt and change the skill mix for the future.
According to Implicator.ai, over 900 affected jobs are in software research and development. By geographical distribution, North America faces 40% of the cuts, followed by Australia at 30%, and India at 16%, with the rest spread across Japan, the Philippines, and elsewhere. A WARN notice in Washington indicated 63 impacted roles, mainly remote engineers and data scientists.
Departing staff will receive at least 16-week severance, an additional week per service year, a pro-rated FY26 bonus, a $1,000 tech payment, and six months of extended healthcare. Costs of restructuring, between $225 million and $236 million, split between severance and office space reduction, will largely impact the third fiscal quarter. Completion is expected by June 2026.
Simultaneously, Rajeev Rajan is stepping down as CTO by March 31, after nearly four years in the role without commenting publicly. Taroon Mandhana and Vikram Rao will assume CTO responsibilities. Mandhana becomes CTO Teamwork, while Rao takes roles as CTO Enterprise and Chief Trust Officer, described as ‘next generation AI talent.’
Despite the changes, Atlassian reported strong performance indicators, including a 26% year-on-year increase in cloud revenue and significant future revenue commitments. The Rovo AI assistant surpassed five million monthly users, with 600+ customers generating over $1 million in annual recurring revenue. Full-year financial guidance remains unchanged.
This combination of robust metrics and workforce reductions intensifies scrutiny on what drives these decisions industry-wide. OpenAI’s Sam Altman called using AI as a cover for other layoffs ‘AI washing,’ noting fewer than 1% of 2025 job losses were directly AI-related.
Atlassian’s steps mirror patterns elsewhere. Block cut 4,000 jobs, WiseTech Global plans 2,000 cuts, and Oracle is downsizing some development teams due to AI. By March 2026, tech layoffs exceeded 45,000 globally, with AI often cited. Whether AI genuinely prompts workforce changes or serves as a convenient explanation amid investor pressure remains unresolved.
Atlassian has struggled financially since 2017, with stock dropping 33% in 2025 before the SaaSpocalypse, down over 84% from its 2021 peak. The restructuring announcement led to a 2% stock rise in after-hours trading, similar to Block’s response, suggesting Cannon-Brookes was mindful of market expectations in his precise framing of the company’s goals.