Australian software firm Atlassian announced layoffs of about 1,600 employees, or 10% of its workforce, to invest in artificial intelligence and enterprise sales. The restructuring aims to rebalance resources for the AI era in teamwork. Company shares rose nearly 2% in extended trading after the news.
Atlassian, known for collaboration tools such as Jira for project management and Confluence for content creation, stated on Wednesday that it would reduce its workforce by around 10%, impacting 1,600 employees. The cuts are intended to self-fund investments in AI and enterprise sales while reorganizing around the company's System of Work to operate more efficiently.
CEO Mike Cannon-Brookes wrote in a memo to staff: “We are doing this 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.”
The company expects to record charges of $225 million to $236 million due to the layoffs and office space reductions, with the bulk in the third quarter. The restructuring plan should be mostly finished by the end of the fourth quarter.
Chief technology officer Rajeev Rajan is set to leave his position on March 31, after almost four years at Atlassian.
This announcement occurs as investors examine software companies over potential AI disruptions to business models. Atlassian's shares dropped about 33% in the previous year but increased nearly 2% in after-hours trading following the disclosure.
D.A. Davidson analyst Gil Luria commented: “Software companies such as Atlassian have an opportunity to make their business more efficient by adopting AI tools, especially within their product development. By reorganizing that way they can reduce the resources necessary to deliver their current business and grow more profitably.”
At the World Economic Forum in January, top executives indicated that AI advancements might lead to job losses but also create new roles, with some noting it could serve as a rationale for existing layoff plans.
