Atlassian Plans 1,600 Layoffs With Savings Shift To AI, Enterprise Sales

‘I believe this is the right decision for Atlassian,’ Atlassian CEO and co-founder Mike Cannon-Brookes said.

Atlassian plans to lay off about 1,600 employees–about 10 percent of its workforce–with the layoffs set to substantially finish by June 30, the end of its 2026 fiscal year, and costing the company about $225 million to $236 million.

The Sydney-based enterprise software vendor–whose products include Jira, Confluence, Loom, Trello and Bitbucket–wants to use the savings in part toward further artificial intelligence and enterprise sales investment, Atlassian CEO and co-founder Mike Cannon-Brookes said in a blog post Wednesday.

“I believe this is the right decision for Atlassian,” the CEO said. “But that doesn’t mean it’s easy. Far from it. I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today.”

Atlassian Layoffs

CRN has reached out to Atlassian for comment. Atlassian has hundreds of partners worldwide, including CRN 2025 Solution Provider 500 members Accenture, Cognizant, Wipro and Infosys, according to the vendor’s website.

Atlassian should still have about 14,000 employees after the layoffs, William Blair said in a report Thursday. The investment firm said to expect more restructuring across software companies with a focus on efficiency in the AI era. Innovations by AI upstarts including Claudemaker Anthropic and ChatGPT maker OpenAI have led investors questioning the future of enterprise software.

William Blair said in its report it still believes that Atlassian can hit 20-plus percent growth over the next couple of years and generate healthy free cash flow.

Cannon-Brookes posted a video with the blog post–recorded with Atlassian’s Loom screen capture tool–calling the layoffs “a very tough day.”

“Days like these are among the toughest that we have as a company, and certainly the toughest that I have as a leader and we have as a collective leadership team,” the CEO said in the video. “I am deeply sorry for the disruption this creates in your life.”

With the savings from the layoff, Atlassian also seeks to strengthen its financial profile and reorganize to move faster, Cannon-Brookes said in the blog post. The company needs to reach sustained profitability under Generally Accepted Accounting Principles (GAAP).

“To Atlassians who are continuing on our journey – I know this is extremely challenging for you too, and we’ll work together to move forward in this next chapter,” Cannon-Brookes said in the post.

In the vendor’s latest quarterly earnings report – released in February for the second quarter of its 2026 fiscal year, ended Dec. 31.— Atlassian reported an operating income of $430.2 million for the second quarter, up 28 percent year on year without using GAAP.

However, with GAAP, the company reported an operating loss of $47.7 million for the quarter–an improvement on the $57.5 million it lost the same period a year prior.

Without GAAP, Atlassian saw net income of $320.9 million for the quarter, up about 26 percent year on year. But with GAAP, Atlassian reported a net loss of $42.6 million–deeper than the $38.2 million it lost in the same period a year prior.

Investors have sought greater profits from Atlassian as a scaled business, according to the Thursday William Blair report.

Atlassian’s stock was down about 53 percent a share year to date as of Thursday evening Eastern, trading at about $73 a share. The stock had fallen about 3 percent from Thursday morning to evening.

A regulatory filing with the U.S. Securities and Exchange Commission on Wednesday added that among the hundreds of millions of dollars Atlassian will pay is about $169 million to $174 million in future cash outlays for severance, notice period, employee transition and benefits payments. The funds also include about $56 million to $62 million in exit charges for office space reductions. The company will pay most of the charges in its third fiscal quarter.

The filing also reaffirmed Atlassian’s forecasts for the current, third fiscal quarter and fiscal year. For the current fiscal quarter, Atlassian forecasts total revenue of about $1.7 billion, cloud revenue growth year on year of about 23 percent, data center revenue growth year on year of about 33.5 percent and marketplace and other revenue growth year on year of about 5 percent, according to the vendor.

For the fiscal year, Atlassian expects total revenue growth year on year of about 22 percent, cloud revenue growth of about 24 percent, data center revenue growth of about 20 percent and marketplace and other revenue growth of about 6 percent.

Among the highlights for Atlassian’s most recently reported fiscal quarter was the vendor’s first $1 billion cloud revenue quarter, up 26 percent year on year, according to Atlassian. It crossed 350,000 customers. Rovo surpassed 5 million monthly active users. Atlassian ended the quarter with more than 55,000 customers with greater than $10,000 in cloud ARR, up 12 percent year on year.

Total revenue grew 23 percent year on year to $1.6 billion, marking more than $6 billion in annual run-rate revenue (ARR). Remaining performance obligation grew 44 percent year on year to $3.8 billion.

Atlassian’s recent advancements in AI include the February open beta release of AI agents in its Jira project management software, allowing users to assign work to agents in the Rovo AI productivity offer as well as third-party agents.

Atlassian isn’t the only technology vendor to consider layoffs as AI remakes the IT landscape and 2026 gets underway, with cuts revealed this year at Autodesk, Kaseya and Amazon.