Another tech giant is culling immense numbers of workers.
On Thursday, prominent Australian software firm Atlassian announced it was laying off ten percent of its workforce, or about 1,600 employees.
Like a growing number of its peers, it wasn’t shy about sharing why: a pivot to AI.
The company, which makes most of its money by selling collaboration software, said it will “rebalance” its resources to focus on the “future of teamwork in the AI era,” Reuters reported.
40 percent of the firings, or about 600 employees, will come from its workforce in North America. Another 30 percent will come from Australia and 16 percent in India, Atlassian said.
The company, however, refused to characterize the firings as a sign of AI replacement.
“Our approach is not ‘AI replaces people,’” CEO Mike Cannon-Brookes said in a memo to employees. “But 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 layoffs come amid significant market anxiety over how AI agents and other tools could affect major software companies. The jittery atmosphere reached a fever pitch in a near-trillion dollar stock sell off last month, spurred by the release of Anthropic’s new Claude Cowork agent, which the company said could automate some white collar tasks, including legal work. The anxiety on Wall Street spiraled so dramatically that key AI figures intervened to quell the fears, including Nvidia chief Jensen Huang, who called the idea that AI could replace software “illogical.”
The Atlassian cuts also mirror layoffs happening at other tech companies. Late last month, Twitter founder and Block CEO Jack Dorsey announced that his fintech company was firing 4,000 employees, or forty percent of its global workforce. Dorsey said that AI had “fundamentally” changed “what it means to build and run a company,” and that it was creating a “new way of working” with smaller teams. Ahead of the cuts, employees complained of mandates from leadership to use AI as much as possible.
Some analysts enthused about tech firms’ recent pivot to AI.
“Software companies such as Atlassian have an opportunity to make their business more efficient by adopting AI tools, especially within their product development,” DA Davidson analyst Gil Luria told Reuters.
Professionals Australia, the union representing Atlassian workers, seemed to consider the sudden nature of the layoffs insulting, noting that employees weren’t consulted or warned about a potential restructuring.
“These are experienced professionals who have helped build one of Australia’s most successful technology companies from the ground up,” Paul Inglis, a director at Professionals Australia, told The Guardian. “They deserve respect, transparency and proper consultation when major decisions about their livelihoods and their future careers are made.”
While AI has been attributed to layoffs across multiple industries, many experts argue that the tech’s over-hyped capabilities are being used to gloss over other reasons for the cuts, such as overhiring during the pandemic, poor management, or a broader economic downturn.
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