The Australian software firm Atlassian has announced plans to cut nearly 10 per cent of its global workforce, a move the company says is tied to a broader restructuring as it increases investment in artificial intelligence.

Around 1,600 roles will be eliminated across several regions. The company disclosed that roughly 640 employees in North America are expected to be affected, alongside about 480 in Australia and 250 in India. Additional cuts will be distributed among teams in Japan, the Philippines, parts of Europe, West Asia and Africa.

The reductions come as Atlassian adjusts its internal structure and technology priorities. As of June 2025, the company employed 13,813 full-time staff globally, with more than half working in software engineering and design.

In a message circulated to employees on Wednesday, chief executive Mike Cannon-Brookes described the decision as part of an effort to reshape the company around emerging technology demands. The restructuring, he said, is intended to strengthen financial resilience and allow the company to fund deeper investment in artificial intelligence and enterprise sales.

Cannon-Brookes said the leadership team had reviewed staffing decisions using company-wide principles and a “disparate impact analysis.” The aim, he noted, was to keep employees whose capabilities align with the company’s direction as it positions itself as an AI-focused organisation.

He identified three groups the company made a particular effort to retain during the restructuring: strong performers, recent graduates and employees whose skills can transfer across multiple roles.

“Guided by company-wide principles and a disparate impact analysis, we made some structural org changes and focused on retaining Atlassians with the skills to help us thrive as an AI-first company,” he wrote in the message. “This included strong performers, graduates, and Atlassians with transferable skills.”

The emphasis on retaining graduates is notable at a time when many companies in technology and other knowledge industries are reassessing entry-level hiring as AI tools become more capable.

Research cited by Business Insider suggests younger workers may already be feeling the pressure. A study by Stanford researchers found that employees aged 22 to 25 working in industries heavily exposed to AI experienced a 16 per cent relative decline in employment.

Concerns have also been raised by technology leaders. Dario Amodei, chief executive of AI company Anthropic, has warned that artificial intelligence could eliminate up to half of entry-level white-collar roles within the next one to five years.

Atlassian itself had recently signalled an increase in graduate hiring compared with the previous two years, saying the company needed to strengthen its research, development and engineering capacity.

Cannon-Brookes acknowledged that AI is changing how companies think about workforce structure. At the same time, he pushed back on suggestions that the technology directly replaces employees.

“Our approach is not ‘AI replaces people’,” he said. “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.”

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For now, the company’s message to staff suggests the shift is less about abandoning talent and more about redefining which skills will shape its next phase.