Atlassian Announces Layoffs, Stock Price Rises as Market Views It as Positive News

Investing.com – Atlassian’s stock price rose 2.5% in pre-market trading after the company announced it would cut about 10% of its workforce.

The software company plans to reduce approximately 1,460 positions out of its 14,626 employees starting from the second quarter, bringing its total staff back to early 2025 levels. CEO Mike Cannon-Brookes stated that the company will redeploy funds into artificial intelligence and enterprise sales initiatives.

In a letter to employees, Cannon-Brookes described AI not as a tool to replace staff but as a force to reshape the company’s required skills and roles.

TEAM’s stock has fallen 77% from its peak last year and 51% year-to-date. The company generates over $5 billion in revenue but has not yet achieved GAAP profitability, with stock-based compensation expenses accounting for 26% of revenue in fiscal 2025.

BTIG analyst comments that this move is “less of a surprise and more a matter of when it would happen.”

They note that as the software industry’s standard shifts toward AI-driven organic revenue growth acceleration, this layoff is another sign that more companies may increasingly leverage AI to improve employee efficiency.

Analysts also emphasize that accelerating the path to sustained GAAP profitability represents a significant narrative shift for a company that has long been valued purely on growth.

Atlassian reaffirmed its third-quarter earnings guidance, which BTIG says is not surprising given that about three weeks remain in the quarter. The company’s R&D expenses remain unusually high for a company at this stage.

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