'AI washing' or real shift? Atlassian cuts 1,600 jobs in latest tech shake-up

For years, the world has heard about the potential impact of AI on the job market. But now, humans are shockingly witnessing this alarming trend driven by artificial intelligence.

In a recent development, software giant Atlassian has announced it will cut 1,600 jobs and replace its chief technology officer in the latest AI-linked restructuring.

According to a spokesperson, the company is laying off over 900 employees, primarily from its software research and development teams. About half of the company’s 13,813 workers are in engineering and design roles.

The layoffs are spread across the globe, with the largest impact in these regions, including North America (640 people), Australia (480 people), India (250 people). Other locations include Japan, the Philippines, Europe, the Middle East, and Africa.

The company’s co-founder, Mike Cannon-Brookes, called this latest restructuring the “right decision for Atlassian.”

“But that doesn’t mean it’s easy. Far from it. I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today,” he added.

Cannon-Brookes also emphasized on the growing role of AI in reshaping the roles, skills and services of the company. AI-driven adoption will help the company to strengthen its financial standing and “self-fund further investment in AI and enterprise sales.”

Since 2026, Atlassian has experienced a major drop in its market value as traders fear that AI will make the software company’s services obsolete.

AI washing is on rise

“AI washing” in the context of layoffs refers to the practice of companies attributing job cuts to artificial intelligence or automation, even when the primary drivers are traditional economic factors like over-hiring, declining revenue, or pressure from investors.

In recent months, AI washing has deepened as various tech companies have rushed to lay off their workers on the grounds of increasing efficiency of AI tools.

In February, Block company announced to cut 40 percent of its global workforce, from 10,000 to under 6,000 as the cofounder Jack Dorsey linked the major shakeup with the rapid advancements in AI tools.

“AI fundamentally changes what it means to build and run a company. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” Dorsey added.

WiseTech announced it would cut 2,000 jobs over two years which is about 30% of its workforce.

Earlier this week, Oracle also announced plans for major job cuts in 2026 in a bid to tackle rising costs of AI data centers, as reported by Bloomberg.

In 2025, Oracle ordered more than 10,000 major layoffs.

Amazon is not behind when it comes to laying off employees across various roles. In January, Amazon decided to cut 16000 jobs globally as part of broader post-pandemic restructuring and the expansion of artificial intelligence adoption.

According to Reuters, Amazon is planning a second round of layoffs to reach its goal of cutting roughly 30,000 corporate jobs.

Analysts at Oxford Economics and MIT have found that while many companies cite AI, the actual data often tells a different story. A 2026 study revealed that 95% of companies investing in AI are currently seeing zero return on investment, suggesting that the technology isn't yet robust enough to replace humans at the scale companies claim.