Atlassian to Cut 10% Workforce for AI Pivot, Incurs $236M Charge
Atlassian will cut about 1,600 jobs—10% of its global workforce—and record $225–236 million in restructuring charges, including severance and office-exit costs. The reductions target 40% of cuts in North America and coincide with CTO Rajan’s departure, while shares rose 2.9% and Mizuho trimmed its price target to $185.
1. Job Cuts Plan
Atlassian announced plans to reduce about 1,600 positions, representing 10% of its global workforce, as it reallocates resources to AI initiatives and enterprise sales. Approximately 40% of the cuts will occur in North America, 30% in Australia and 16% in India.
2. Financial Impact
The company expects to incur restructuring charges totaling $225–236 million, including severance payouts and office-exit costs, with most expenses landing in the third fiscal quarter and substantial completion by the fourth.
3. Market Reaction and Analysts
Shares climbed 2.9% following the announcement, while Mizuho lowered its price target to $185 from $205 but retained an outperform rating. Of 28 analysts covering the name, 21 maintain a buy or better recommendation.
4. Leadership Change
CTO Rajeev Rajan will step down effective March 31, reflecting a broader realignment of executive roles as part of the company's shift toward AI capabilities.