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Atlassian to cut roughly 1,600 jobs in pivot to AI

reuters.com

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Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#61

Post by bmac »

heohk wrote: post #16

What does the "incur $230 million in charges" mean? Why would it cost them money to lay people off and have less office space? Possibly a bad LLM edit; maybe they meant to say would save $230 million through reduced headcount and less office space?

One time charges are pretty typical when layoffs are announced. They are usually the cost of severance pay for the weeks or months of salary paid to employees who are no longer working. Office space leases are typically long term (multiple years) and accounting rules require they recognize the expected future cost of that now-useless space when the layoff decision is made. In practice, cash won't actually change hands for the office space until rent is due in future months. And companies will work with the landlord to get out of the lease (but often pay some penalty for the privilege).

Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#62

Post by jbl0ndie »

heohk wrote: post #16

What does the "incur $230 million in charges" mean? Why would it cost them money to lay people off and have less office space? Possibly a bad LLM edit; maybe they meant to say would save $230 million through reduced headcount and less office space?

Possibly not. Buying yourself out of employment and commercial rental contracts can give rise to costs.

In the UK, statutory redundancy pay, after 2 years of service, is 1 week of pay per year of service and 1.5 weeks if you're over 41.

For a long duration commercial lease it might be worth paying to break the contract rather than the running costs for an unused building.

These are probably short-term costs, with longer term savings projected from the reduction in headcount and premises.

Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#63

Post by MeetingsBrowser »

Layoffs because of AI make no sense to me.

Imagine you own a company that is paid to deliver packages. You use horses and differentiate by delivering quicker than everyone else.

Then cars are invented and everyone starts delivering packages faster.

In what world does a healthy growing business react to this by laying off couriers "in a pivot to automotive transportation".

Would a healthy business not switch everyone to driving cars and deliver even more packages?

Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#65

Post by mvdtnz »

quicklime wrote: post #56
tombert wrote: post #7

Please don't tell me that Jira is about to get even worse... I don't understand the AI layoffs; there's always an infinite supply of new work that could be done. Instead of firing 1600 people, why not have all of them use AI to produce more stuff and outrun their competitors. Presumably all their competitors also know about Claude as well, and a lot of these 1600 people will go work for them and use Claude. Unless th…

It’s not that their employees are no longer needed, it’s that their product (jira) is no longer needed. When you’ve got AI agents taking bigger and bigger steps, you don’t need to micromanage people through jira as much anymore. Companies will likely switch to something lighter. Jira regularly makes it to the top of lists of the most hated enterprise software, there’s definitely appetite in the market for a replaceme…

This is developer wishcasting, to be frank. AI has not obviated the need for Jira and the idea that companies are moving to "something lighter" (what are they moving to?) has no basis in reality.

Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#66

Post by mjfisher »

esskay wrote: post #42
mjfisher wrote: post #35

Can anyone recommend good alternatives to Jira? Things that keep me defaulting to it: - Scales well from simple configuration and workflows to more complex multiboard views/custom fields/layouts per issue type etc - Good OOTB integration with common CI/CD - see PRs, deploys etc from each ticket - Good (adequate?) integration with their wiki in Confluence - JQL for being able to do custom reporting tooling (get me all…

Notepad. Seriously, you need a heck of a lot more than a random HN reply to give you Jira alternatives if you've been embedded into its ecosystem for any length of time - and my condolences if you have.

It's fine, just not stellar. It was terrible (UX, speed, consistency) ten years ago. It's better now - mostly gets out of people's way and just works. It doesn't delight me.

Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#67

Post by ryandrake »

alexpotato wrote: post #14
tombert wrote: post #7

Please don't tell me that Jira is about to get even worse... I don't understand the AI layoffs; there's always an infinite supply of new work that could be done. Instead of firing 1600 people, why not have all of them use AI to produce more stuff and outrun their competitors. Presumably all their competitors also know about Claude as well, and a lot of these 1600 people will go work for them and use Claude. Unless th…

> there's always an infinite supply of new work that could be done I distinctly remember a discussion where someone says "Man, I wish JIRA would add this feature/fix this bug" Someone else pipes in: "I bet there is already a ticket on the JIRA bugtracker/feature board for this, it's not done and it's from 9 years ago" and lo and behold there was.

Unfortunately, none of these companies are going to turn their AI loose on important, annoying, 9 year old bugs. They're just going to use it to cram more unwanted features into their software, just like they're doing today with human developers.

Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#69

Post by stego-tech »

tombert wrote: post #7

Please don't tell me that Jira is about to get even worse... I don't understand the AI layoffs; there's always an infinite supply of new work that could be done. Instead of firing 1600 people, why not have all of them use AI to produce more stuff and outrun their competitors. Presumably all their competitors also know about Claude as well, and a lot of these 1600 people will go work for them and use Claude. Unless th…

The comments hit at some, but not all, of the underlying drivers. I'll add a more comprehensive view and let you draw your own conclusions:

* Their balance sheet paints a messy picture. Their gross profit per quarter doubled from 23Q1 ($668mn) to 26Q2 ($1.35bn), but their net income has been a consistent loss - from -$13mn in 23Q1, to -$42.6mn in 26Q2. The company has generally failed to turn a meaningful profit after considering operating expenses, reflecting misaligned priorities of leadership.

* Their headcount similarly whipsaws of late. In 2021, it was 8.8k; by 2025, it was 13.8k; in the middle of COVID, it was as low as 6.4k. Even after these job cuts, their headcount remains roughly flat from 2025.

* Cutting jobs to invest in AI when you're already slowly bleeding cash isn't exactly a winning strategy. Atlassian's products have the benefit of organizational "stickiness", and their push to a cloud-only SaaS model hasn't gone all that well if you read the IT rags (lots of uniquely complicated migrations that don't transition well 1:1 to SaaS).

* That said, pointing to AI while cutting jobs isn't a bad play when you're courting investors, many of whom doubt the long-term viability of the XaaS model when AI can slop up boilerplate and internal-only solutions on the fly. If they're doing it to genuinely cut costs and try and right the ship, fingering AI isn't a bad cover.

* Except the reality is most of Atlassian's leadership gets their comp in equity, which has taken a serious hit of late on the markets just as vesting schedules wind down and leadership is changing over. I'd be on the lookout for SEC Form 4's from insiders in the coming weeks to confirm whether or not this was the case.

The reality is that the "AI layoffs" ploy is almost exclusively a cover story for corporations reasserting dominance and power over workers after a few (comparatively) good years (WFH, higher pay increases, wage gains, flex-time, etc). Every single one of these entities obviously has more work than people to do it, but if they can squeeze 90% of the workforce for 110% of the hours, that's a net gain for the corporation and a net loss for workers.

Efficiency, over-hiring, right-sizing, AI; it's all bullshit smokescreens for greed, plain and simple. Don't be fooled by narratives to the contrary.

Re: Atlassian to cut roughly 1,600 jobs in pivot to AI

#70

Post by quicklime »

mvdtnz wrote: post #65
quicklime wrote: post #56

Earlier quoted context omitted.

It’s not that their employees are no longer needed, it’s that their product (jira) is no longer needed. When you’ve got AI agents taking bigger and bigger steps, you don’t need to micromanage people through jira as much anymore. Companies will likely switch to something lighter. Jira regularly makes it to the top of lists of the most hated enterprise software, there’s definitely appetite in the market for a replaceme…

This is developer wishcasting, to be frank. AI has not obviated the need for Jira and the idea that companies are moving to "something lighter" (what are they moving to?) has no basis in reality.

Maybe you’re right, maybe you’re not. But if you’re right i think it’s more “investor wishcasting” than developers.

It really doesn’t matter what us devs think. Investors and industry leaders have decided that AI development is the way forward and we’re going to be managing teams of agents from now on. So we’re not going back to fine-grained task management in jira - what used to live in jira will now live markdown files, and largely be written and read by agents.

Higher level tasks might go into something like Linear, who knows.

If the investors are wrong, and this is all fantasy, then maybe people will go back to Jira, and Atlassian stocks will recover.

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