Shares of Atlassian (NASDAQ:TEAM) climbed 2.5% in premarket trading after the company revealed plans to reduce its workforce by about 10%.
The software firm said it intends to eliminate roughly 1,460 roles from its employee base of 14,626 as of the second quarter, bringing staffing levels back to where they stood in early 2025. Chief Executive Officer Mike Cannon-Brookes said the company plans to redirect resources toward artificial intelligence and Enterprise Sales initiatives.
In a message to employees, Cannon-Brookes emphasized that AI should not be viewed as a direct replacement for staff but rather as a technology that is changing the types of skills and positions needed within the company.
Atlassian’s stock has dropped sharply in recent months, falling about 77% from last year’s peak and 51% since the start of the year. Despite generating more than $5 billion in revenue, the company has yet to achieve profitability under GAAP accounting standards, with stock-based compensation accounting for about 26% of revenue in fiscal 2025.
BTIG analysts said the announcement appeared largely expected, noting that the move felt “less like a surprise and more like a matter of not if, but when.”
They added that as the software industry increasingly focuses on organic growth driven by artificial intelligence, workforce reductions could become more common as companies pursue greater efficiency through AI-enabled operations.
The analysts also pointed out that Atlassian’s push toward sustained GAAP profitability represents an important shift in its narrative, as the company has historically been valued primarily for its growth potential.
Atlassian also reaffirmed its guidance for the third quarter. BTIG said this was not unexpected given that only about three weeks remain in the quarter, while noting that the company’s research and development spending remains unusually high for a business at this stage of maturity.