Atlassian will lay off around 10 percent of its workforce, or 1600 employees, to push into artificial intelligence and enterprise sales.
Shares of the enterprise software company rose nearly two percent in extended trading after Atlassian said it plans to “rebalance” its resources to focus on the “future of teamwork in the AI era.”
The company expects to incur about US$225 million to US$236 million ($315 million to $331 million) in charges related to the layoffs and office space reductions, according to a regulatory filing.
The majority of these charges will be incurred in the third quarter.
“We are doing this to self-fund further investment in AI and enterprise sales, while strengthening our financial profile.
“We’re also changing the way we work and reorganising around our system of work to move faster,” CEO Mike Cannon-Brookes said in a memo to employees.
The move comes as investors increasingly scrutinise software firms amid fears that advances in artificial intelligence could disrupt traditional software business models, though some analysts say the sector-wide selloff may be an overreaction.
Top executives at the World Economic Forum’s annual meeting in January had said that while jobs would disappear, new ones would spring up, with two telling Reuters that AI would be used as an excuse by companies that were already planning layoffs anyway.
Atlassian said Rajeev Rajan will step down from the role of chief technology officer, effective March 31, after almost four years with the company.
It also named Taroon Mandhana as CTO of Teamwork and Vikram Rao as CTO of Enterprise and chief trust officer to oversee its AI-focused roadmap.
The company expects the restructuring process to be substantially complete by the end of the fourth quarter.
