Atlassian cuts 10% of workforce due to 'AI era' impact

Another tech company is introducing job cuts and blaming it on AI.

Atlassian, a leading software firm known for products like Jira, Trello, and Confluence, shared on Wednesday its decision to lay off about 1,600 employees, which represents close to 10% of its global team, as part of a restructuring focused on AI and business growth.

In a document submitted to the US Securities and Exchange Commission, the company based in Sydney outlined that these layoffs are a strategic move to transition into what CEO Mike Cannon-Brookes calls the "AI era." Approximately 30% of the positions affected are located in Australia.

These cuts follow similar ones at Block, the owner of services like Cash App and Afterpay. 

Block downsized nearly half of its employees, citing the rise of AI advancements as the cause.

In a note to the staff, Cannon-Brookes addressed AI's rising role in reshaping the company's employment needs.

"Denying AI's influence on the skills we need or on particular job areas would be untruthful. It does have an impact," Cannon-Brookes explained.

"While I strongly believe this is the best path forward for Atlassian, it is far from easy," Cannon-Brookes continued. 

"I recognise the significant effect this has on each of you, and it weighs heavily on my mind and Atlassian today."

Atlassian was established in 2002 by Cannon-Brookes and Scott Farquhar, and both are ranked among Australia's top 50 wealthiest individuals by Forbes.

According to the SEC submission, employees affected by the cuts will be provided with at least 16 weeks of severance and benefits, alongside extended medical care and prorated bonuses.

The workforce reduction aligns with Atlassian's aggressive drive into AI, including acquisitions of The Browser Company, creator of Arc and Dia browsers, and DX, a developer intelligence platform which they intend to integrate into products like Jira and Bitbucket.