In a message to staff, Atlassian chief executive Mike Cannon-Brookes said the decision to shed 1600 people was incredibly difficult, as staff were left waiting for an email advising them if they were on the list.
"I believe this is the right decision for Atlassian. But that doesn't mean it's easy. Far from it," he said, according to documents filed in the US stock exchange.
"I know this has a huge impact on each of you, and it weighs heavily on me and Atlassian today.
"To Atlassians who are leaving us - I'm sorry for the impact this will have on you."
The increasing adoption of artificial intelligence drove the decision, he said.
"This is primarily about adaptation. We are reshaping our skill mix and changing how we work to build for the future," Mr Cannon-Brookes said.
Atlassian employs about 14,500 people in 14 countries across the world.
Of the 1600 job cuts, 30 per cent are based in Australia, a spokesperson told AAP.
In February, the Sydney-headquartered software company reported $US1.6 billion ($A2.3 billion) in revenue for the three months to December 31, up 23 per cent from a year ago and ahead of expectations.
But its net loss for the second quarter widened to $US42.6 million ($A61 million), up from $US38.2 million ($A54.7 million) a year ago.
Atlassian makes a suite of cloud-based collaboration tools, including Jira and Trello, used for software development and project management.
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