Atlassian Cuts 10% Of Workforce, CEO Cites AI Push For Layoffs

• A filing with the U.S. Securities and Exchange Commission (SEC) showed that CEO Mike Cannon-Brookes told employees in an internal note that the move was “the right decision for Atlassian.”
• Atlassian said that it will incur about $225 million to $236 million in charges related to the layoffs.
• Shares of the company edged up marginally in extended trading hours.

Australian software giant Atlassian Corporation Plc (TEAM) said on Wednesday that it is laying off about 1,600 workers, or 10% of its workforce, amid a restructuring to advance its artificial intelligence push.

A filing with the U.S. Securities and Exchange Commission (SEC) showed that CEO Mike Cannon-Brookes told employees in an internal note that the move was “the right decision for Atlassian,” adding that “it would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas. It does.”

Shares of TEAM climbed in extended trading hours after the announcement, trading about 1.5% higher at the time of writing.

Layoff Impact

Atlassian said that it will incur about $225 million to $236 million in charges related to the layoffs, with about $169 million to $174 million expected to result in future cash outlays in relation to severance, notice period, employee transition, and benefits payments.

The company said that approximately $56 million to $62 million would likely come from exit charges associated with office space reductions.

The Australian company also noted that a majority of these charges would likely be incurred in the third quarter of fiscal year 2026 and the execution of these actions, including cash payments, would be completed by the end of the fourth quarter of fiscal year 2026.

“We took a thoughtful and incredibly thorough approach to determining impacted roles. Guided by company-wide principles and a disparate impact analysis, we
made some structural org changes and focused on retaining Atlassians with the skills to help us thrive as an AI-first company - this included strong performers,
graduates, and Atlassians with transferable skills,” the CEO said in the note.

Last week, Jack Dorsey's Block also cut back more than 4,000 people from its workforce, citing AI-related changes.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around TEAM shares stayed in the ‘bearish’ territory amid ‘low’ message volumes.

One bullish user sympathized with those who lost their jobs, but added that it would be good in the long term for the company.

Meanwhile, TEAM shares have declined more than 51% in the past year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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