So, like a lot of the tech industry this is simply a case of overhiring, overspending and general mismanagement. And like every other such layoff announcement “AI” is the convenient scapegoat.
could an AI native competitor eventually eat their lunch? sure. but "no new sane company wants to use their products" is a stretch when their customer count is literally still growing double digits.
i would not say "writing on the wall" at all.
source?
I can't wait for Atlassian physical sticky-notes to take over.
[Edit: grammo and formatting]
The real problem is that company decisions will never be made as fast as software can be written (and rewritten) now.
No, the opposite; it is predicated on software being cheap and easy to ship, but hard to correctly anticipate the needs for.
> It might not make sense to continue (waterfall might be better actually)
Waterfall, not agile, is predicated on software being difficult to ship/expensive.
Or, do you tell it the basic functionality you want, test it out, then add feature after feature that you want, sometimes dropping them and sometimes adding new ones that you thought of as your worked.
the problem with this is long term maintainability. it works - and the engineer understands how it works - but a) the AI does not prioritize cleanup/organization/naming, and b) there's a blind spot/boiling frog type of phenomenon that can prevent the engineer from spotting the growing problem. the codebase becomes recognizable only to them. the engineer sees all features working, all bugs fixed, 90% test coverage, and submits it for a PR.
the engineer tasked with reviewing the PR will treat it as slop.
If anything, their solving the complete wrong problems and being blind to the actual problems is probably a reason AI won't actually result in any real, top-level appreciable gains in shipping speed.
Software is still "difficult to ship/expensive". Code is very cheap now. Any kind of non-slop software is still expensive.
I think these companies should be pivoting to something where tasks/issues are the places you write the prompts for the AI, or augment the prompts that devs use. It's a big shift though.
My specialty is software requirements and my team was brought in to do the product management. The developers had read somewhere if you were using a database to do requirements then you were doing agile wrong.
They wanted me to write post it notes in triplicate, then fedex them to all their offices.
https://www.doublerobotics.com/
Isn't the solution obvious? Yes I have seen and worked at Web 1.99 companies buying these. "Telepresence". Yikes.
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?
That's because these layoffs aren't about AI. They're about firms that overhired and Wall St is (finally) having a sobering moment of their (profit) growth potential.
How long does a "sobering moment" last? Two years? Five? Ten?
On a more serious note, at this rate, probably 10 years. I guess it's similar to drinking. You can get drunk in 10 minutes and be hung over for much longer than that.
It turns out that org charts are VERY resistant to letting people go, even when the executives push very hard.
Millions of horses got shipped to the glue factory. And many more farriers and stablemasters got laid off.
They are betting that their AI business will be profitable, and need to cut costs to invest in it.
I think AI is a wonderful excuse for many. You can now lay off as many people as you want without standing out in a negative way. "Everyone is doing it" and "everyone knows why it's happening".
It could be. The idea that a business built on this framework won't immediately be picked apart by every competitor under the sun is entirely beyond me.
> and need to cut costs to invest in it.
If I'm right then this is just slashing your own throat so you can be the first to the bottom.
a.k.a the real reason for the layoffs. The underlying business is stagnant and unable to take advantage of the additional resources.
Strong businesses aim to grow revenue. Struggling businesses aim to cut costs.
Horses/cars improve productivity. AI reduces payroll costs. That's the whole game here.
Capital will always be in opposition to the cost of labor and want to make it as close to zero as possible, and AI is a plausible story for attempting that, regardless of the reality of AI efficiency.
Businesses ultimately need customers. In a world where AI does all the work, there will be no buyers.
https://www.cbsnews.com/detroit/news/henry-ford-implements-5...
The strategy for institutional investors is to invest in servicing the needs of the already rich, at the expense of investing in companies that serve working people. The former is much more profitable than the latter, and the latter is becoming less profitable over time.
In other words, the business is not doing well
If you build cars and you replace people with robots, you might fire those people because those robots allow you to keep up with demand with less people. Your business is doing fine and well but you just need less people to do the same output. Better yet those robots might even produce more than what your demand is and therefore even if demand increases your ability to supply with less people still exists.
Businesses will always look to do the same output or more with less cost irrespective of whether the company is doing well or not. This is why we have also seen "AI layoffs" across companies that have had very good financial positions or even record sales.
The proof is in the pudding if AI actually improves productivity of those left over to justify it. But sometimes simple analogies can be rebutted by other simple analogies.
The Java products are almost EOL.
They have already been assigning JAC tickets to Rovo and $TEAM is down.
What else should be done with the surplus headcount?
Layoffs have little to do with AI, and more akin to fuel being jettisoned to stay in the air longer.
Replacing headcount with technology? Also old hat.
If the cuts ate into the good parts of the business, I will worry. I doubt that happened.
Stagnant, yes. Mature also.
Why? What was wrong with the 1600 people they sacked? Do they have a magical 1600-person hire pool with the AI skills they want?
Some of the firms, Apple being the exception, doubled or even almost tripled in size.
I'm sure AI is partly to blame here but I think a lot of it is over hiring and firms just getting bogged down in bureaucracy and trying to clear things out.
You need people driving AI to get the benefits.
Its like a courier service that uses horses firing people once cars are invented because cars are faster than horses. You would switch everyone from horses to cars and deliver more packages.
If your postal service services a population of a million people and it takes 1000 horses to do that easily, but it takes 500 cars, you don't have a need for those 500 extra people.
You can't deliver more packages if the packages aren't there to be delivered. Your product demand doesn't just magically scale up once supply meets it.
What healthy business aims to stagnate in the face of a revolutionary technology?
which may actually be the problem. I suspect that there is actually some ideal ratio that could be calculated of Input Fields / Dev, LoC / Devs, or maybe Unique Pages / Dev, or some mix of all of the above. Some of the metrics I hear out of places like airbnb absolutely blow my mind (>5000 engineers! wtaf are they all doing?!?). I can sort of see the #s at google, MS making sense given the breadth of the problems they are solving, but other places, not so much.
Dev users assume the only problem a product can solve is performance, when there is a lot more than that in reality.
So are they doing this to make the product better or, as others have mentioned, they can’t innovate further and can’t grow their market so they need to cut costs.
Okay I just wrote an "it's not, it's..." organically, is this the zeitgeist or what.
It is a great excuse for underperforming and incompetent CEOs.
It provides the CEO with a wonderful excuse for sacking people.
JIRA is just fine, gets the job done. Its not slow like the on-prem. Jira cloud version is fine.
The cloud version I used was slow and riddled with bugs. Entire views sometimes just refused to load or render, or something.
Did it "get the job done?" Yes, in a literal reading of those words, I suppose it did, but anyone who understands the amount of work that a modern 2.4 GHz CPU should be able to do per unit time would not think highly of it.
Nowadays … my company uses Linear … which, while it does have a sleeker, more modern looking UI … is nobody able to make a good bug tracker?
I work on Aha! Develop https://www.aha.io/develop/overview which I obviously think is a great tool, especially if you're a team with a product manager.
We don't really know, if the layoffs are because of AI.
https://www.thelayoff.com/ - This site is a discussion forum, some fake information before the actual layoffs.
Be interesting to see the numbers graphed over time.
Funny thing about AI layoffs is the cloud cover it provides to do it. Which I know is not a fresh insight. :-)
In HR speak, if you 'reduce headcount' because you over hired or needed to cut costs, then that's a bad signal to the markets.
If you do it because of AI efficiencies, you are an innovative industry leader and your stock goes up.
Atlassian stock up 2% on the news :-/
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 this is just regular layoffs, but they know if they brand it as "AI" their investors will eat it up.
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.
AI isn't going to help, but it bandaids over the issue so the investors aren't spooked.
Laying thousands of people off often implies you hired thousands of more people than you actually needed, which makes investors feel like you're wasting their money. If you say "no they're all being replaced for $200/month of Claude Code!" then it makes you look like there was actually strategy to this.
I definitely buy this for the software sector or the economy as a whole, but for an individual company? Seems one would be bottlenecked by various factors quickly.
Perhaps better to let people go so that they can be productive elsewhere?
I have worked for a bunch of companies, and even relatively new and young companies have all these things pile up pretty quickly.
True. Joining thousands of other unemployed developers sending applications into a job posting for a nonexistent role online is very productive. Probably good for the economy too now that I think about it.
Alternative take: I can't speak for BitBucket because I've never used it, but I've had enough time with JIRA and Confluence to last a lifetime, and these products are so bad - so clunky, so slow, so much friction in the UI - that I can't really see what useful value adding work Atlassian's 16,000 employees have actually been delivering. From that perspective losing 1600 of them seems like it's not likely to make much difference since, from my perspective as a user, they didn't appear to be doing anything useful in the first place.
I'm sorry if that comes across as a particularly savage take but Atlassian have wilfully been churning out absolute garbage for at least 15 years now (there was a time, in around 2006/7, when I thought JIRA was quite good - genuinely) and their products have made me miserable throughout a good chunk of my career, so my sympathy is pretty limited. If they can be bothered to make the products better, faster, more usable, and remove friction ruthlessly at every turn in their workflows, then I might well change my point of view.
I agree with pretty much everything you said; I don't actually think that it's due to AI is my point. If their products are terrible and they're finally losing business over it, it makes enough sense to fire 10% of the workforce. I just don't think AI has much to do with it.
* 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.
Antidotal but I have spoken to friends at Google who are telling me many co-workers say "I tried it didn't work, ill do it myself" when really they just didn't try very hard at all.
Edit: that is to say, if you had a % of your workforce avoiding helping you explore a current trend (valuable or not tbd sure), I can see rational arguments around removing them from the team.
The latter is actually the more pertinent item, as I've seen several times that an initiative get rolled out by leadership, some teams have free time to play around and use it, and other teams have so much on their plate that they're barely able to keep their heads above water, let alone take on another experiment. If someone is worried about getting a project knocked out by end of month/quarter/year in order to keep their job, they're not going to mess about.
Now, that's a leadership failure, but it happens more often than not.
If you can get something into "good enough" territory in 1/10th the time of someone who can get it into "great" territory, that is often worth it.
Jira regularly makes it to the top of lists of the most hated enterprise software, there’s definitely appetite in the market for a replacement.
Their stock has been taking a huge hit over the last few months because of this: https://www.smh.com.au/business/companies/ai-is-eating-softw...
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.
And since the fact that claude code is an electron app and not AI generated optimized binary per platform, it's abundantly clear that perhaps AI is not all they hype it up to be.
Either way, I'd expect that those 1,600 people using AI to solve Atlassian's big problems would be better for the company in the long-run than reducing headcount with the same level of output
But let's try to spin it up as if we were some kind of AI mavens who are reaping humongous increases in productivity due to our thought leadership in AI.
- CEO (under pressure to move in the AI space) comes across as an AI maven
- The shareholders improve margins
I think we're reeling from rate increases. Too much free money for too long.
Tariffs
War in the Middle East
US economy that would likely be in recession if not for massive datacenter spend
Oil at ~$100
But we're laying people off because... AI
Their services are barely usable with extreme bloat and lag. With such strong engineering practices, they are poised to make fools of themselves. Can't wait.
I’m honestly not sure what you even use AI for in Jira. Maybe there’s a purpose, but 90% of us are just moving tickets across the most expensive kanban board that money can… rent.
There are still skeletons but a lot of the page components load instantly(cached) and others load quite quickly.
Tons of UI "jank" has been cleaned up across Jira and Confluence. The UI design, in general, has also finally cleaned up nicely and "settled".
Confluence articles load very fast now. They have also added Live documents which is a very welcome addition.
Is Jira still bloated? Yeah, but that doesn't preclude improvements. It feels less bloated now to me.
YMMV.
I don’t know exactly what the other issue is referring to.
Looking this up now, Wikipedia says the wiki markup was abandoned already in 2011. Not that I think Confluence was ever a great wiki, but at least having pages that were backed by some resonable plaintext markup was much better than not having that.
Everything else has been UI changes as far as I've seen.
If anyone from atlassian reads this: please, for the love of god resolve this issue.
To be clear, I agree with the terrible products part - but currently they are not dying because there is no alternative platform which is flexible, scalable and feature-complete enough. You may find alternatives for niches, like GitHub for software engineering, but the Atlassian stuff allows for knowledge transfer and familiarity across many many domains. I've seen it used anywhere from government burocracy to customer service and construction companies. They nailed the abstraction for flexible issue management, just the implementation is terrible.
Possibly a bad LLM edit; maybe they meant to say would save $230 million through reduced headcount and less office space?
In several countries, laying off people come with legal requirements for mandatory minimal severance, health insurance extensions, legal taxes and government fees and all kind of compensatory one-time payments for the fired employeer.
But $230 million over 1,600 is $145k per person.
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.
Makes you look innovative.
Would be interesting to know if they are majority engineering, or if that's a lot of sales and marketing and support and other roles in there.
KB: Notion over Confluence no question
Just a couple examples, you could swap a dozen other better vendors in either category.
What does Atlassian have but inertial lock-in to keep them going?
I don't think any AI productivity gains are involved.
That’s why “slop” is so appropriate. It’s the runoff from the taps poured into a glass. Tastes like everything, nothing, definitely not pleasing, probably cheap, still effective at getting you inebriated.
Fuck ‘em. Rolling my own using shelfware, kthxbai.
@dang
AI is a convenient way to hide their their poor strategy and execution.
- 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 issues transitioned to X status in this time period)
Things that frustrate me:
- Complexity/UI around configuration
- Very poor kanban metrics reporting
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.