Atlassian announced a 10% cut to its global headcount as it ramps up investment in AI software development. The move is expected to free up budget previously allocated to salaries and raises, accelerating the company’s AI product roadmap.

A survey of 866 business leaders revealed that 26% plan layoffs and 54% are reducing employee raises to fund AI initiatives. These figures illustrate a broader shift of labor costs into AI expenditures across the technology sector.

While the workforce reduction will bolster Atlassian’s AI R&D funding, it also raises concerns about employee morale and long-term retention in the competitive tech job market. High-performing staff may seek better compensation elsewhere if raises remain constrained.