Big Tech leaders once pointed to the economy when cutting jobs. Now they point to AI.
Recent layoff memos — including those from Block and Atlassian — read less like apologetic explanations of economic headwinds or cost-cutting initiatives, and more like strategic manifestos for the AI era.
Block’s Jack Dorsey and Atlassian’s Mike Cannon-Brookes both frankly highlight profound shifts in how they see technology reshaping work and, therefore, how many workers they’ll need in the years to come.
New technology, combined with smaller and flatter teams, Dorsey wrote in his late-February memo, is “enabling a new way of working which fundamentally changes what it means to build and run a company.” He said on February 26th that the company would cut more than 40% of its workforce.
Atlassian, the software company that makes productivity tools like Jira and Trello, announced a cut of about 10% on Wednesday. In his memo, Cannon-Brookes didn’t just detail severance packages or highlight factors like macroeconomic pressures — the usual fodder of such missives.
He instead laid out the company’s AI philosophy and how it was restructuring in response, using boldface for emphasis: “We fundamentally believe people and AI create the best outcomes.”
The stepped-up focus on where companies need to go — rather than the economic constraints that might have led them to make the cuts — is new, Rick Wargo, managing partner and global technology practice leader at the executive search firm Boyden, told Business Insider.
“As things have progressed, they’ve come to realize that different skills are needed than perhaps what they hired for,” he said of business leaders.
A new AI era
Recently, other leaders have also cited AI’s impact when making cuts, including Meta, Angi, and WiseTech. In June, Amazon’s Andy Jassy wrote that the company’s AI push would mean the company’s corporate workforce would shrink, though in subsequent reductions, Amazon identified the need for a cultural reset.
Both Dorsey and Cannon-Brookes said the cuts aren’t a symptom of an ailing business and used their layoff memos to make the case for their visions for their respective companies in the new AI age. Dorsey said that the company’s profitability is improving.
The company’s CFO also said during the company’s fourth-quarter earnings call that, because of AI, the code each of its engineers ships has increased by more than 40% since September.
“We’ve seen engineering work that would have taken weeks to complete be done by a small team in a fraction of the time with agentic coding tools,” said Amrita Ahuja, who is also the company’s COO.
At Atlassian, Cannon-Brookes wrote, “We have momentum.” He went on to highlight gains in cloud revenue and other metrics.
Layoff memos often highlight a company’s strength and stability. These latest notes go further than some by outlining leadership’s priorities for those who remain.
Cannon-Brookes framed Atlassian’s cutbacks as being about adaptation: “We are reshaping our skill mix and changing how we work to build for the future,” he wrote.
The limits of AI
Amid the waves of tech layoffs, there has been much discussion about whether AI is at the root of these reductions — even when it’s explicitly framed that way.
AI likely doesn’t account for all the layoffs tech companies are making, Will Wilson, CEO and cofounder of Antithesis, an autonomous software-testing platform, told Business Insider.
“It’s not like growing companies have stopped hiring people,” he said.
Yet Wilson said that as AI improves, the chance it could replace workers increases.
Previously, the technology provided little, if any, productivity benefit to most people, Wilson said. Now, he said, it’s clearly offering some efficiency windfall in areas like coding.
Even so, there are limits to how much companies that go big on AI will be able to cut, said Josh Bersin, CEO of The Josh Bersin Company, a consulting firm. AI can automate something like code generation, but it doesn’t eliminate the need for workers, he said.
“You have to check the code,” Bersin told Business Insider. “You still have to test it. You still have to update it. You still have to maintain it. You still need to do the production management.”
No matter the debate over how much AI is driving the cuts versus just age-old business imperatives, some leaders are using layoff announcements to lay out their vision for how their companies will navigate this new moment.
Cannon-Brookes ended his message by saying that Atlassian had navigated multiple tech shifts and market cycles — and thrived while doing so.
“This will require continual adaptation. Decisiveness,” he wrote. “And making hard decisions to set Atlassian up strongly for the long term.”
