Atlassian, whose stock has been heavily impacted during the SaaS industry downturn, stated that the staff reductions are intended to free up more capital for investment in artificial intelligence and sales operations.

The company, which provides project collaboration software for developers and other business teams, announced through a blog post by CEO Mike Cannon-Brookes that it will cut approximately 1,600 jobs, representing 10% of its total workforce.

Amid investor concerns about the disruptive effect of AI on enterprise software, Atlassian has been one of the most affected companies: its stock has fallen more than 50% year-to-date and has declined over 65% in the past 12 months.

Cannon-Brookes indicated that following the layoffs, Atlassian plans to increase its investments in AI and corporate sales while placing greater emphasis on profitability.

"Our philosophy is not 'AI replaces people,'" he wrote in the post. "But it would be dishonest to pretend that AI won't change the composition of skills we need or the number of certain roles—it is indeed transforming these areas."