Atlassian slashes 10% of workforce to 'self-fund' investments in AI and enterprise sales

Atlassian announced on Wednesday a significant restructuring plan that involves cutting 10% of its workforce, equating to approximately 1,600 positions. This decision comes in response to a steep decline in the company's stock price, which has been influenced by the rapid advancements in artificial intelligence. CEO Mike Cannon-Brookes shared in a blog post that the layoffs are part of a strategy to 'self-fund' further investments in AI and boost enterprise sales, while also aiming to enhance the company’s overall financial health. Notifications regarding job status will be sent to affected employees via email. The company's stock has plummeted more than 50% this year, reflecting a broader downturn in software stocks as investors express concerns over the competitive landscape shaped by generative AI tools, like Anthropic's Claude Cowork. Since its peak in 2021, Atlassian's shares have fallen by an alarming 84%. Previously, Atlassian thrived during the pandemic, as demand for cloud-based collaboration tools surged among remote workers. The recent job cuts are expected to incur costs between $225 million and $236 million, with the majority of the layoffs anticipated to be completed by the end of June. Earlier this year, the company also reduced its staff by 500, or 5% of its total workforce. The maker of Jira project tracking software is actively working to enhance interest in its Rovo AI features, which recently celebrated reaching 5 million monthly users. This is a developing story, and updates will follow as more information becomes available.