He told staff Atlassian was reframing itself as an \u201cAI-first company\u201d, and while artificial intelligence would not directly replace the roles, it was the core trigger for the change.<\/p>\n
\u201cWe fundamentally believe people and AI create the best outcomes,\u201d he said.<\/p>\n
Mike Cannon-Brookes says the company is becoming \u201cAI-first\u201d as it restructures and eliminates roughly 1600 roles. Photo \/ Getty Iamges<\/p>\n
\u201cOur approach is not \u2018AI replaces people\u2019. But it would be disingenuous to pretend AI doesn\u2019t change the mix of skills we need or the number of roles required in certain areas. It does.<\/p>\n
\u201cThis is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future.\u201d<\/p>\n
Impacted staff will receive a minimum 16-week global separation package with one week additional for each year of service, pro-rated bonuses for FY26, a US$1000 ($1693) technology stipend upon return of the company laptop, and an extra six months paid on healthcare plans for eligible employees and family.<\/p>\n
\u201cI believe this is the right decision for Atlassian,\u201d Cannon-Brookes said. <\/p>\n
\u201cBut that doesn\u2019t mean it\u2019s easy. Far from it. I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today. <\/p>\n
\u201cWe are doing this to self-fund further investment in AI and enterprise sales, while strengthening our financial profile. We\u2019re also changing the way we work and reorganising around our System of Work to move faster.\u201d <\/p>\n
The restructure is estimated to cost Atlassian up to US$236 million, with most of this going to the cost of severance packages and the rest to \u201cexit charges associated with office space reductions\u201d. <\/p>\n
The company\u2019s new A$1.45 billion ($1.75b) headquarters in Sydney is still under construction.<\/p>\n
Cannon-Brookes loses A$7.2 billion in utter bloodbath<\/p>\n
This all comes as Cannon-Brookes \u2013 one of Australia\u2019s richest men \u2013 lost almost half his net worth amid a brutal global tech sell-off sparked by fears AI will make his company obsolete.<\/p>\n
The climate activist and net zero champion, who was worth A$14.9b just last year, now has a net worth of around A$7.7b as his company Atlassian\u2019s share price continues a brutal downward spiral.<\/p>\n
He came out swinging this week, saying claims AI would kill his company are \u201cludicrous\u201d.<\/p>\n
Atlassian is a leading Australian-American software company that develops products for software development, project management and team collaboration.<\/p>\n
The company became a Nasdaq-listed tech powerhouse that generated billions of dollars in revenue, but its share price has plummeted almost 74% in the past 12 months.<\/p>\n
The shift towards artificial intelligence is reshaping the types of skills and roles tech companies say they need inside modern software teams. Photo \/ Getty Iamges<\/p>\n
One of the big factors driving this decline is the fear that AI makes traditional Software-as-a-Service (SaaS) companies like Atlassian obsolete.<\/p>\n
In early February this year, companies like Anthropic and OpenAI released \u201cAI agents\u201d that can autonomously manage tasks and write code. Investors fear these agents will replace the human software developers who are Atlassian\u2019s primary users.<\/p>\n
Atlassian also makes money based on how many \u201cseats\u201d (users) a company pays for. If a firm uses AI to do the work of 10 people with just two, for example, Atlassian loses 80% of its revenue from that client.<\/p>\n
Atlassian\u2019s large corporate customers may, in the future, not need as many IT staff given AI can now do many tech workers\u2019 roles, such as coding.<\/p>\n
On the surface at least, Cannon-Brookes\u2019 Sydney-founded company is still growing. It reported an adjusted net profit of US$320.9m in the December quarter, up from US$255.6m in the prior corresponding quarter in December 2024. Total sales also grew 23% to US$1.6b.<\/p>\n
However, investors are clearly not impressed with the rate of growth and are spooked by projections showing growth slowing from 23% down towards the high teens. In the brutal world of Wall Street trading, any sign of deceleration can lead to a massive sell-off.<\/p>\n
Despite this, Cannon-Brookes told investors he \u201ccouldn\u2019t be more bullish\u201d about the opportunities ahead, despite relentlessly selling his own shares in the company daily.<\/p>\n
The Nightly reports he kept selling 7665 shares on a daily basis even in the month before the results at prices ranging from US$161.11 a share on January 8 to US$105.14 on February 4.<\/p>\n
Cannon-Brookes appeared on venture capitalist Harry Stebbings\u2019 20VC podcast this week, saying claims that SaaS is dead were \u201cludicrous\u201d.<\/p>\n
\u201cApparently, we\u2019re some sort of cavemen sitting around banging on clicky, clacky keyboards and writing assembly code who haven\u2019t figured out large language models,\u201d he said. \u201cWe\u2019re not just bolting on AI features, we\u2019re building it.\u201d<\/p>\n
Atlassian freezes hiring<\/p>\n
Amid the share price tumble and AI fears, Atlassian last month called a halt on hiring engineers and filling other related roles, rolling back its global recruitment.<\/p>\n
Desperate applicants claim they\u2019ve been \u201cghosted\u201d or had offers snatched away at the eleventh hour.<\/p>\n
Job seekers have taken to social media and employee forums like Blind to vent their frustrations after being caught in the sudden recruitment shutdown.<\/p>\n
Tech companies are pouring investment into AI infrastructure and automation as they adapt their business models to the next wave of computing. Photo \/ Getty Iamges<\/p>\n
\u201cGot an [engineering] offer … After three weeks of silence I finally messaged the hiring manager on LinkedIn they told me its a hiring freezing [sic],\u201d one person posted on employee forum Blind.<\/p>\n
\u201cSame my interview in 6 hours was just cancelled and all I was told was the position is no longer available. Very frustrating as I\u2019ve been prepping for weeks,\u201d another post from last week reads.<\/p>\n
Atlassian employs more than 12,000 people and usually has hundreds of positions available. But its global jobs board now shows just 40 vacancies in sales and a dozen positions for general interns and graduates.<\/p>\n
Billionaire admits to \u2018deep internal conflict\u2019 over private jet<\/p>\n
Cannon-Brookes is known for being one of Australia\u2019s richest men, but he has also made a name for himself in the political world by championing the move towards net zero.<\/p>\n
But while ordinary Aussies are asked to make big changes, the 46-year-old decided to treat himself to a ritzy new private jet late last year, admitting to a \u201cdeep internal conflict\u201d over the carbon-heavy method of travel.<\/p>\n
The Atlassian co-founder and chief executive bought a Bombardier 7500 and will use it to travel across his vast business operations, which include a minority stake in the Utah Jazz NBA team and a sponsorship deal with Formula 1.<\/p>\n
In a statement posted to LinkedIn, Cannon-Brookes confirmed the purchase of the jet and acknowledged it would be a \u201ccarbon-intensive\u201d way to travel.<\/p>\n
\u201cI\u2019m not denying I have a deep internal conflict on this,\u201d he said.<\/p>\n
\u201cThere\u2019s a couple of reasons I\u2019ve purchased a plane.<\/p>\n
\u201cPersonal security is the primary reason (an unfortunate reality of my world) but also so I can run a global business from Australia, and still be a constantly present dad.<\/p>\n
\u201cSo, this is a hard, continual trade-off I\u2019ve decided to make.<\/p>\n
\u201cAlthough private aviation is far from a big contributor to global emissions, it is a carbon-intensive way to travel.\u201d<\/p>\n
The Bombardier 7500 boasts GE Passport engines, a maximum range of 7700 nautical miles, a top mach speed of 0.925 and can carry up to 19 passengers.<\/p>\n
Cannon-Brookes said he would \u201cfar exceed\u201d his carbon flight footprint with \u201can extremely rigorous carbon regime\u201d, including the use of direct air capture and sustainable fuels.<\/p>\n
Mike Cannon-Brookes’ purchase of a Bombardier Global 7500 has drawn scrutiny amid his climate advocacy and the company\u2019s restructuring. Photo \/ Getty Images<\/p>\n
\u201cThese options aren\u2019t practical for commercial flights but are viable privately,\u201d he said.<\/p>\n
\u201cThis means my flights actually have a net negative carbon footprint.<\/p>\n
\u201cMy commitment to climate is as strong as ever. I\u2019m still pretty damn focused on making an impact at a large scale, removing huge volumes of emissions through active investments and philanthropy \u2026 and have the proud scars to prove it.\u201d<\/p>\n
He is a key investor in SunCable\u2019s giant Australia-Asia PowerLink project, which hopes to funnel energy from solar farms in the Northern Territory to Singapore via a subsea power cable.<\/p>\n
More to come<\/p>\n
Sign up to Herald Premium Editor\u2019s Picks<\/a>, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week\u2019s best features, interviews and investigations. Sign up for Herald Premium here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"He told staff Atlassian was reframing itself as an \u201cAI-first company\u201d, and while artificial intelligence would not directly…\n","protected":false},"author":2,"featured_media":325743,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[68068,1443,365,4146,138,3595,3588,8985,1138,78,232,111,139,69,15400,16121,74235,370,61,1533],"class_list":["post-325742","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-68068","tag-about","tag-ai","tag-atlassian","tag-business","tag-by","tag-cut","tag-era","tag-firm","tag-in","tag-jobs","tag-new-zealand","tag-newzealand","tag-nz","tag-push","tag-responds","tag-sydneybased","tag-tech","tag-to","tag-will"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/325742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=325742"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/325742\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/325743"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=325742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=325742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=325742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}