Atlassian Slashes 1,600 Jobs, Dumps CTO in AI Pivot
Atlassian is cutting 10 percent of its global workforce and replacing its CTO — six months after opening a landmark R&D centre it now partly dismantled in the name of AI.
Six months ago, Atlassian's then-chief technology officer stood inside a gleaming new R&D centre in Bengaluru and called it a symbol of the future. On March 11, the company announced it would cut 250 of the engineers who work there — and replace the CTO who championed the expansion.
The technology giant said it will eliminate 1,600 positions — roughly 10 percent of its global workforce — in a restructuring designed to pivot toward artificial intelligence and enterprise sales. More than 900 of those jobs sit in software research and development.
Rajeev Rajan, the Indian-origin chief technology officer who has led the company since 2023, will step down March 31. Two executives will replace him: Taroon Mandhana as CTO of Teamwork and Vikram Rao as CTO of Enterprise and Chief Trust Officer. An SEC filing describes both as "next generation AI talent."
The announcement lands with particular sting for Rajan personally. In September 2025, he unveiled the Bengaluru centre — a facility spanning two lakh square feet, nearly four times Atlassian's previous space in the city — before an audience that included the engineers now facing cuts.
"This new world-class R&D centre is more than just a larger space," Rajan said at the time. "It's a symbol of our investment in the future of work, in distributed teamwork, and most importantly, in the exceptional talent we have here in India."
That investment now looks precarious. India accounts for more than 2,500 of Atlassian's employees — the company's largest base outside Australia and the United States — with 75 percent working in R&D roles. The 250 Indian positions being eliminated represent 16 percent of the total layoffs, a disproportionate hit to the workforce Rajan spent years building.
CEO Mike Cannon-Brookes defended the decision in a memo to employees, framing it as an honest reckoning with the AI era rather than a euphemism for cost-cutting.
"Our approach is not 'AI replaces people,'" Cannon-Brookes wrote. "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. It does."
The justification echoes a pattern spreading fast across the industry. In February, Block — the fintech company founded by former Twitter CEO Jack Dorsey — laid off 4,000 employees, nearly half its workforce, citing AI productivity gains. Atlassian's announcement makes it the second major tech company in three weeks to follow that same playbook.
Not everyone accepts the framing at face value. OpenAI CEO Sam Altman argued in February that companies are using AI as cover for cuts driven by other pressures — a practice he called "AI washing" — and noted that fewer than 1 percent of 2025 job losses could be traced to artificial intelligence.
The financial picture gives that skepticism weight. Atlassian's stock has fallen more than 50 percent since January and approximately 64 percent over the past 12 months, a collapse that mirrors a broader "SaaSpocalypse" selloff hammering enterprise software companies. For the fourth quarter of fiscal year 2025, Atlassian posted revenue of $1.384 billion, up 22 percent year-over-year — yet still recorded a net loss of $42 million, missing the profitability expectations that once underpinned its valuation.
"We are doing this to self-fund further investment in AI and enterprise sales, while strengthening our financial profile," Cannon-Brookes said.
The restructuring will cost between $225 million and $236 million, according to the company's SEC filing — $169 million to $174 million in severance and employee costs, plus $56 million to $62 million for office space reductions. Affected workers will receive a minimum of 16 weeks' pay, extended health coverage, a pro-rated bonus, a $1,000 technology payment, individual HR support, visa and relocation assistance, and career transition support.
Atlassian also said it would retain its graduate hires, including 108 new employees from the February 2026 intake. Cannon-Brookes framed that decision as a rebuttal to "a narrative that AI will replace junior roles" — a signal that the company is betting on newer talent shaped by AI tools from the start.
Union representatives pushed back. Paul Inglis, director at Professionals Australia, argued the cuts betray the workers who built the company.
"These are experienced professionals who have helped build one of Australia's most successful technology companies from the ground up," Inglis said. "They deserve respect, transparency and proper consultation when major decisions about their livelihoods and their future careers are made."
Analysts saw the moves differently — as a rational response to shifting market conditions. Gil Luria of D.A. Davidson argued the restructuring positions Atlassian to grow leaner and faster.
"Software companies such as Atlassian have an opportunity to make their business more efficient by adopting AI tools, especially within their product development," Luria said. "By reorganizing that way they can reduce the resources necessary to deliver their current business and grow more profitably."
The announcement coincided with the close of Atlassian's quarterly earnings, which carried some bright spots: Rovo AI crossed 5 million monthly active users, cloud revenue grew 26 percent year-over-year, and remaining performance obligations surged 44 percent to $3.814 billion. In after-hours trading, Atlassian shares rose approximately 2 to 4 percent. The restructuring is expected to be substantially complete by the end of June 2026.
For the 1,600 workers who received the news, the market's relief offers cold comfort — their livelihoods reduced to a line item in a restructuring the company priced at up to $236 million and expects to close before summer.