Atlassian trims workforce, citing AI shift, echoing Block’s strategy

Australian productivity software company Atlassian has carried out layoffs as it looks to direct more resources toward AI.

Atlassian said it is cutting 10% of its workforce, or around 1,600 employees, as of March 11. The company said the move will allow it to allocate more money to AI and enterprise sales while also strengthening its financial position.

More specifically, Atlassian said the business is performing well, but it is choosing to adjust to current market conditions.

“The bar for what ‘great’ looks like for software companies — on growth, on profitability, on speed, on value creation — has gone up,” Atlassian CEO Mike Cannon-Brookes said in a press release tied to the layoffs.

The announcement comes only a few weeks after a similar, though more dramatic, message from Block CEO Jack Dorsey. In February, the payments company said it was cutting more than 4,000 employees, nearly half of its roughly 10,000-person workforce at the time.

Dorsey said those reductions were being driven by the reality that AI could automate much of the work those employees had been doing. He predicted that many other companies would eventually reach the same conclusion.

Several enterprise-focused venture capitalists had predicted that 2026 would be the year AI began to take a meaningful toll on labour. So far, that prediction appears to be playing out.