In the heart of Sydney, as commuters rush between platforms to catch trains at Central Station, a striking new cutting edge timber hybrid tower casts a shadow over the buildings it dwarfs around it.
It sticks out like a sore thumb in Haymarket – a part of the city that isn’t characterised by gleaming skyscrapers of glass and steel like the deeper CBD to its north – as it stretches 39 storeys into the sky.
The $1.4 billion building — dubbed Atlassian Central — is a joint project between the tech behemoth it is named after and property developer Dexus, which holds the base build construction costs.
Reaching its highest structural point in a recent “topping out” milestone, the hybrid timber and steel tower now stands as the tallest timber hybrid building in the world at approximately 180 metres tall — roughly 100 metres taller than the previous record holder.
Yet, as the structure rises, it sits at the intersection of a rapidly changing tech industry, shifting workplace trends and the spectre of an AI jobs revolution.
Tower comes after massive job cuts
Atlassian knows perhaps more than most about the impact of AI on jobs, as it laid off roughly 10 per cent of its global workforce – some 1600 employees, including nearly 500 in Australia – earlier this year.
Co-founder and CEO Mike Cannon-Brookes said the primary objective was to “self-fund further investment in AI and enterprise sales” while strengthening the company’s financial profile.
Renowned AI expert and chief scientist at UNSW.ai Professor Toby Walsh said the gleaming new tower combined with the sweeping job cuts highlights a “major paradox” facing tech companies.
“On the one hand, there’s lots of evidence from around the world that innovation happens when you put people together, where there’s a geographical concentration of businesses, especially when there’s some high-profile anchor tenant like Atlassian to bring everyone together,” he told news.com.au, pointing to established ecosystems like Silicon Valley, London’s Tech Roundabout, Berlin and Stockholm.
“On the other hand, we’re seeing lots of companies, especially in the tech sector, laying off up to 20 per cent of their staff.”
With tech workers among the most frequent adopters of remote work, committing to a massive physical footprint may appear counterintuitive.
“Ever since Covid, I only go into the office at most half the days of the week,” Prof Walsh said.
“For people who’ve already got their careers going and already have their connections, there’s so many efficiencies in terms of one’s personal life, one’s family life, working from home.”
However, he said physical proximity remains vital for the spontaneous collaboration and creative sparks that tech companies thrive on — what he called the “water cooler moments” — and one way to do this was to attract staff back, which requires thoughtful investment.
“I think companies are going to increasingly feel that they have to invest in ensuring that there are those chance conversations,” he said.
“They need to make an office in an attractive place, so that people want to be there and spend the 45 minutes it takes to get there.”
That sense of creativity and collaboration is exactly what Atlassian is trying to achieve with its eye-catching new tower in Sydney.
Wild way workers will use the tower
Asked about the tower’s occupancy and purpose after laying off hundreds of employees, the company gave news.com.au a fascinating insight into how working in the tower will play out day-to-day.
Gina Creegan, Atlassian’s head of workplace, said the tower has been designed for the “future of work from day one”.
“The timber habitats bring that vision to life, connecting spaces that are purpose-built for how we work,” she said.
“Instead of traditional desk rows, workspaces are designed around distinct modes of work: deep focus, collaboration, social connection and recharge.”
It is understood that each of these states of work will have its own dedicated floors inside the building — with focus rooms, sprint rooms, small meeting rooms and customer and event spaces across dedicated floors.
They’re also designed to feel like vertical neighbourhoods, with park floors, terraces and natural materials designed to give space to reset between different modes of work.
The idea is that workers will move between these sections of the building throughout the day rather than sitting at one assigned desk.
Under the company’s “Team Anywhere” policy, it’s understood there will be no attendance quotas or a mandated number of office days, so the building will not be built for a fixed attendance target or desk per employee ratios.
It’s also understood that while the tower will be mainly for Sydney-based workers who come into the office regularly, it’s also designed for customer events, community and team gatherings.
“We’re building what the biggest technology companies in the world have, with customer experience centres, partner collaboration spaces and team environments designed specifically for a global workforce,” Ms Creegan said.
Beyond workplace strategy, the building’s environmental design marks a significant shift in urban architecture for Sydney, as it will be by far the biggest timber hybrid tower in the Southern Hemisphere.
Prof Walsh said he has “great admiration” for Atlassian for using a significant amount of wood instead of all the concrete with all the carbon.
“It’s an interesting building, not just from a work perspective, but from a building perspective in terms of sustainability,” he said.
On track for practical completion near the end of the year, with interior fit-outs commencing in early 2027 ahead of a formal 2028 opening, the tower stands as a high-stakes bet on the future of collaborative work in Australia, despite the global headwinds it is facing.
Why the gamble could pay off big time
Atlassian’s push into high-end, purpose-built space is far from an isolated gamble — it reflects a broader, systemic shift playing out across Australia’s commercial property market.
Data from the Property Council of Australia released this week reveals a stark market divide: while general office vacancies remain elevated, demand is surging at the top end.
In the first six months of 2026, premium-grade CBD vacancy dropped by 1.2 per cent down to 10.2 per cent, driven by positive net absorption across major capitals including Sydney and Melbourne.
Property Council chief executive Mike Zorbas said the office sector has moved from correction into a recovery phase defined by a sharp “flight to quality”.
“Major occupiers are seeking the best buildings,” Mr Zorbas said.
“Businesses in general continue to seek workplaces that support collaboration, attract talent and provide the offerings people value.”
At the same time, new development has slowed to a crawl.
Just 176,303 square metres of office space was completed nationally in the first half of 2026 — the lowest level in nearly a decade — with the supply pipeline expected to remain subdued through to 2029.
For a landmark like Atlassian Central, this constrained pipeline could prove to be an unexpected tailwind.
As old-style desk-bound offices lose favour and businesses scramble for premium, eco-friendly hubs to lure remote workers back, Atlassian’s 39-storey timber hybrid isn’t just a new head office — it could prove to be the exact type of high-grade space modern corporate tenants are competing to secure at a time when a severe construction drought makes them harder to come by.
Atlassian stuns entire world
Many in the finance world had written off Atlassian as a canary in the coalmine for the tech industry amid an AI revolution, but the Australian-American software giant has left them with egg on their faces this morning.
The NASDAQ-listed tech powerhouse that develops products for software development, project management and team collaboration has made headlines several times this year for the wrong reasons.
Its co-founder and CEO Mike Cannon-Brookes, also known for being a climate activist and net zero champion, saw his net worth dive by $7.2 billion at the start of the year amid a brutal global tech sell-off sparked by fears AI will make his company obsolete.
Investors had punished the company, largely over fears that AI makes traditional Software-as-a-Service (SaaS) companies like Atlassian obsolete.
In early February, companies like Anthropic and OpenAI released “AI Agents” that can autonomously manage tasks and write code. Investors fear these agents will replace the human software developers who are Atlassian’s primary users.
Atlassian also makes money based on how many “seats” (users) a company pays for. If a firm uses AI to do the work of 10 people with just two, for example, Atlassian loses 80 per cent of its revenue from that client.
Atlassian’s large corporate customers may, in the future, not need as many IT staff given AI can now do many tech workers’ roles, such as coding.
He told investors earlier in the year that he “couldn’t be more bullish” about the opportunities ahead.
It turns out his optimism was well placed.
On Friday, the company revealed how things were going in its quarterly results shortly after the closing bell in New York, and it took many by surprise.
The results showed the company is thriving, despite concerns about AI — sending its share price soaring by a seismic 35 per cent in extended trading on Friday morning.
The massive surge completely undoes a share price slump that has seen the company’s value drop by 28.81 per cent since the start of the year.
‘It’s paying off’: Cannon-Brookes
Mr Cannon-Brookes said the strong results were proof the company’s bold moves are working.
“Q4 closes out a year that proves our long-term strategy is paying off,” he said in a statement. “In the AI era, context is the edge but it’s hard to build and can’t be hired.”
He also flagged he would be buying $US250 million worth of shares in his own company on the open market.
Atlassian posted a total fourth-quarter revenue of US$1.77 billion ($2.71 billion), up 28 per cent compared to the same period last year.
Driven by strong demand, it swung back into the black with a June quarter net profit of US$139 million ($213 million) — a huge reversal from the US$24 million loss recorded a year ago.
Mr Cannon-Brookes said Atlassian’s AI agent, Rovo, had grown its users by more than 50 per cent quarter-on-quarter.
For the full 2026 financial year, total revenue surged 26 per cent to US$6.57 billion ($10.08 billion).
Stripping out one-off costs, full-year underlying profit reached a massive $US1.53 billion ($2.35 billion), up from $US976 million in the previous financial year. The company closed out the quarter sitting on a cash reserve of $US1.24 billion.
Atlassian hasn’t turned a full-year bottom-line profit since 2016, largely because it pays staff so much in company shares — a massive expense on its official books.
Instead of traditional profit figures, the tech giant has always asked investors to judge its success using custom financial measures that strip out those share payments and one-off costs.
However, after changing how it handles employee share packages, Atlassian has now told the market it expects to deliver an official, full-year profit this financial year.
Despite the stellar finish to the financial year, Atlassian warned investors that revenue growth is set to drop by half next financial year — slowing from 26 per cent down to 13 per cent.
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