Atlassian is laying off approximately 10% of its workforce, impacting 1,600 employees, as the enterprise software company pivots towards artificial intelligence and enterprise sales.
The move aims to "rebalance" resources for the "future of teamwork in the AI era," according to a company statement. Atlassian expects to incur charges between $225 million and $236 million related to the workforce reduction and office space consolidation, with the majority of these costs recognized in the third quarter.
CEO Mike Cannon-Brookes stated the layoffs are intended to "self-fund further investment in AI and enterprise sales, while strengthening our financial profile." The company is also reorganizing its operations around its "System of Work" to improve agility.
This strategic shift occurs as the software sector faces increased scrutiny over the potential disruption of artificial intelligence on traditional business models.
Rajeev Rajan will depart as Chief Technology Officer on March 31. Atlassian anticipates the restructuring will be largely completed by the end of the fourth quarter.