Atlassian follows Block’s footsteps and cuts staff in the name of AI

Australian productivity software company Atlassian held layoffs as the company looks to funnel more money into AI.

Atlassian announced it’s cutting 10% of its workforce, around 1,600 people, on March 11. The company said this decision allows it to spend more funds on AI and enterprise sales and to strengthen its finances.

More specifically, Atlassian said that it’s doing well but is choosing to adapt to 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 wrote in a press release related to the layoffs.

TechCrunch reached out to Atlassian for more information regarding which types of roles were cut and what happens next. Atlassian declined to comment beyond the release.

This news comes just a few weeks after a similar, albeit more drastic, statement was made by Block CEO Jack Dorsey. In February, the payments company announced it was cutting more than 4,000 employees, nearly half of its 10,000 employees at the time.

Dorsey said the cuts were being driven by the fact that AI could automate a lot of the work these employees were doing and predicted that many other companies would come to the same conclusion.

Several enterprise-focused VCs predicted to TechCrunch that 2026 would be the year that AI would start to take a meaningful toll on labor.

So far, their prediction has come true.