Atlassian Cut 1,600 Jobs in the Name of AI. The Stock Went Up

In Brief

Atlassian laid off 1,600 people or roughly 10% of its workforce, and explicitly named AI as the reason. The company is profitable and growing. The stock rose on the news.

Meanwhile, a new dashboard is tracking 76,800 AI-linked job losses globally since January 2025, and organizations such as the Windfall Trust are trying to build contingency plans that most governments and corporations have not even started.

What Happened

Atlassian, the Australian software company behind Jira, Confluence, and Trello, announced this week it is cutting approximately 1,600 jobs. That is roughly 10% of its entire global workforce. The company explicitly attributed the reductions to getting ready for the "AI era," making it one of the first major tech companies to publicly name AI as the primary driver of large-scale job cuts rather than citing restructuring, efficiency, or macroeconomic conditions.

The Guardian described the announcement as a "devastating blow" to staff. Reuters reported the layoffs as a "pivot to AI," signaling that Atlassian sees the cuts not as a temporary measure but as strategic repositioning for an AI-first future. The cuts span multiple teams and geographies: 40% in North America, 30% in Australia, and 16% in India.

This is not a struggling company trimming costs. Atlassian's cloud revenue hit $1.067 billion last quarter, up 26% year-over-year. The stock rose 1-2% in extended trading following the announcement. The company anticipates up to $236 million in charges related to severance and reduced office space.

There is also a contradiction worth noting. In October 2025, CEO Mike Cannon-Brookes said on a podcast that in five years, Atlassian would have more engineers. More than half of the 1,600 people laid off were engineers.

SmarterX and Marketing AI Institute founder and CEO Paul Roetzer broke down what this story signals about the accelerating pace of AI-driven job loss on Episode 203 of The Artificial Intelligence Show.

The Key Numbers

1,600 - Jobs cut at Atlassian, roughly 10% of its global workforce

$1.067 billion - Atlaassian cloud revenue last quarter, up 26% year-over-year

76,800 - Total AI-linked job losses tracked globally since January 2025

42.5% - Underemployment rate for recent college graduates at the end of 2025, the highest since 2020

Why Job Loss from AI is Becoming a Weekly Story

The frequency is accelerating. Roetzer's first reaction was one that a lot of people are probably feeling: "I hate that this is becoming a weekly topic now," he says. He pointed out that AI-driven job losses have become so frequent they could fill a recurring segment.

"We could put a placeholder in every week: 'Okay, what are the 10 things this week that happened in jobs in the economy?'" 

—Paul Roetzer, founder and CEO of SmarterX

The framing is getting more explicit. What makes the Atlassian story stand out is that the company acknowledged publicly that AI is the reason for the layoffs. Most companies cite restructuring, efficiency or market conditions when announcing layoffs. As Roetzer notes, the Business Insider article "touched on the CEO acknowledging the growing influence of AI on the company's workforce needs. Said 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 pipeline is full. Atlassian is not the only story this week. Reuters reported that Meta is planning sweeping layoffs that could affect 20% or more of the company. "As I have said in recent months, I am aware of major layoffs coming at a lot of companies. I can't disclose who they are and exactly how I know these things sometimes," says Roetzer. The layoffs already making headlines are, in his view, the beginning. "I would just say that these are the kinds of things I've been expecting and trying to point out on the podcast that this stuff was coming," he says.

The entry-level pipeline is eroding. ServiceNow CEO Bill McDermott told CNBC's Squawk on the Street that unemployment for new college graduates "could easily go into the mid thirties in the next couple of years." ServiceNow has a market cap of roughly $120 billion. McDermott added: "So much of the work is going to be done by agents, so it's going to be challenging for young people to differentiate themselves in the corporate environment."

SmarterX Take

The Alliance for Secure AI launched jobloss.ai this week, a live dashboard that tracks every publicly reported AI-linked job loss in real time. According to the dashboard, there have been about 87,700 total AI-linked job losses globally since January 2025, with about 66,470 of those in the United States. Recent additions include Block (4,000), Dow (4,500), and DBS Bank (4,000) and of course, Atlassian.

A separate Fortune report found that nearly 75% of unemployed people do not even apply for unemployment benefits, due to complex eligibility rules and state-by-state discrepancies. So a critical safety net is not catching many in need.

So who is actually working on solutions? Roetzer pointed to the Windfall Trust, an independent organization seeded by the Future of Life Institute whose board includes Jaan Tallinn, an early investor in Anthropic. The Windfall Trust describes itself not as a think tank but as a "policy accelerator for the age of Artificial Intelligence."

Its premise is that if AI labs achieve their stated goal of building human-level AI, the economic disruption will require planning that does not currently exist. Roetzer learned about the organization through Brookings Institution Senior Fellow Molly Kinder, who wrote that "uncertainty is not an excuse for inaction. It's a reason to plan smarter." She compared the approach to national security scenario planning: We prepare for bioterrorism attacks and cyberattacks not because we're certain they will happen, but because the cost of being unprepared is too high.

Roetzer says people who say with certainty that everything will be fine are not being honest.

"It is disingenuous and it is harmful to take this highly confident belief that it'll just work out," he says. "You do not know that. No one knows that."

—Paul Roetzer, founder and CEO of SmarterX

At a minimum, he says, we should create contingency planning for worst-case scenario outcomes or even mid-range scenario outcomes. 

What to Watch

The entry-level pipeline deserves special attention. Even for those who disagree with the most severe projections, the data for younger workers is already alarming. The Federal Reserve Bank of New York put the underemployment rate for recent college graduates at 42.5% at the end of 2025, the highest level since 2020. If you have young people in your life, this is real.

Atlassian is a profitable company with rising revenue that just cut 10% of its workforce and told the world it was because of AI. The stock went up. That single fact tells you more about where this is heading than any prediction.

Further Reading

Atlassian Lays Off 10% of Its Global Workforce and Attributes the Cut to the 'AI Era' → businessinsider.com

Atlassian to Lay Off About 1,600 People in Pivot to AI → reuters.com

'Devastating Blow': Atlassian Lays Off 1,600 Workers Ahead of AI Push → theguardian.com

The AI Job Loss Dashboard → jobloss.ai

Windfall Trust → windfalltrust.org

AI Layoffs Are Coming, Nearly 75% Don't Apply for Unemployment → fortune.com

The Invisible Layoff: AI Is Quietly Locking Americans Out of the Job Market → foxbusiness.com

Heard on The Artificial Intelligence Show, Episode 203
Paul Roetzer and Mike Kaput discuss Atlassian's AI-driven layoffs, the jobloss.ai dashboard, and who is actually planning for the economic disruption ahead. Listen →