Atlassian announced Wednesday it will lay off approximately 1,600 employees, about 10% of its workforce, to pivot towards artificial intelligence and enterprise sales.
The enterprise software company aims to "rebalance" its resources, focusing on the future of teamwork in the AI era. This strategic shift is expected to incur charges of $225 million to $236 million, primarily in the third quarter, covering layoffs and office space reductions.
CEO Mike Cannon-Brookes stated the layoffs will self-fund further investment in AI and enterprise sales, strengthening the company's financial profile and enabling faster operations. This move occurs as the software sector faces increased scrutiny over AI's potential to disrupt business models.
In leadership changes, Rajeev Rajan will depart as Chief Technology Officer on March 31. Taroon Mandhana has been appointed CTO of Teamwork, and Vikram Rao will serve as CTO of Enterprise and chief trust officer, guiding the company's AI roadmap.