Software company Atlassian has announced plans to lay off nearly 10 per cent of its workforce, affecting around 1,600 employees worldwide. The decision forms part of a broader restructuring effort as the company increases its focus on artificial intelligence and adjusts its talent requirements.

As of June 2025, Atlassian had more than 13,800 full-time employees, with over half working in software engineering and design roles.

Layoffs across multiple regions

According to details reported by The Guardian, the job cuts will impact several regions. About 640 employees in North America are expected to be affected, along with roughly 480 in Australia and around 250 in India.

Also Read | Flipkart cuts up to 500 jobs after annual reviews despite revenue growth

Additional layoffs will take place across other locations, including Japan, the Philippines, Europe, West Asia and Africa.

The restructuring also includes changes to the company's technology leadership as Atlassian shifts resources towards AI-focused operations.

Three groups the company plans to retain

In a message to employees released on Wednesday, Atlassian CEO Mike Cannon-Brookes outlined the categories of workers the company is prioritising as it reshapes its workforce.

According to Business Insider, he highlighted three groups that the company aims to retain despite the downsizing: high-performing employees, graduates, and staff with skills that can be applied across multiple 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," Cannon-Brookes wrote.

Focus on graduates stands out

While retaining top performers and adaptable employees is a common strategy during restructuring, Atlassian's decision to emphasise graduates is notable.

Concerns have been growing that artificial intelligence could reduce opportunities for entry-level workers. Research cited by Business Insider suggests that younger professionals are already feeling the effects.

Also Read | What is coffee badging? The hybrid work trend gaining traction among Gen Z

A study by Stanford researchers found that employees aged 22 to 25 working in AI-exposed sectors experienced a "16 per cent relative employment decline". At the same time, Anthropic CEO Dario Amodei has warned that AI could eliminate up to half of entry-level white-collar roles within the next one to five years.

Despite these concerns, Atlassian had recently indicated that it was increasing graduate hiring compared with the previous two years to strengthen its research, development and engineering capabilities.

AI reshaping the company's workforce strategy

Cannon-Brookes said the restructuring reflects changes in the types of skills required as artificial intelligence becomes more central to the company's operations.

The aim, he noted, is to strengthen financial resilience while enabling the company to "self-fund further investment in AI and enterprise sales".

He also addressed speculation that AI itself was directly replacing workers.

"Our approach is not 'AI replaces people'. But 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."

Support measures for affected employees

In a separate message explaining the decision, Cannon-Brookes said the company had carefully evaluated options before moving forward with the layoffs.

CEO Mike Cannon-Brookes said that "build with heart and balance" means we consider and weigh up all options before we make decisions. Decisions require heart (humanity, empathy, passion), and balance (pragmatism, trade-offs, decisiveness).

"In this moment, we are balancing making the right (hard) decision for Atlassian, while supporting our people through this change," he said.

Also Read | Indian H-1B visa holder stuck in India after visiting sick mother, delay threatens US job

He added that the company conducted a detailed process to determine which roles would be affected.

"For employees impacted by the layoffs, Atlassian said it would offer support beyond the minimum requirements in each region.

These measures include a minimum 16-week global separation package, with an additional week for each year of service. Affected employees will also receive prorated bonuses for FY26, a $1,000 technology payment upon returning company laptops, and extended healthcare coverage for six months for eligible workers and their families.

The company is also offering HR consultations, continued access to its Modern Health and Employee Assistance Program (EAP), and support for internal mobility opportunities.

Additional services will assist employees seeking new jobs, including outplacement help and visa-related support, while future-dated paid parental leave will be paid out in full," he announced.