AI is used to justify the redundancies, and the company still expects to grow in this fiscal year. In the SEC filling the specifically mention more “head count” in “go-to-market” roles [1].
> a reduction of approximately 7% of our workforce
> Advances in AI, automation, and technology are reshaping how work gets done, and we're changing with them. (…) That's what this reorganization is for: a simpler structure, with fewer layers, less complexity, and less friction.
> The changes we announced today are a sign of confidence in the business, not a retreat from it. We continue to invest in key growth areas and expect total headcount to grow year-over-year this fiscal year [the SEC filling says “ The Company plans to continue hiring in key strategic areas and locations, including continuing to grow headcount in customer-facing go-to-market functions, and expects total headcount to grow this fiscal year compared to last fiscal year, as it continues to invest in future growth opportunities”]
[1]: https://ir.elastic.co/financials/sec-filings/sec-filings-det...
Fair source > Open source.
Trillion dollar companies need to pay to play.
Open source removes your jobs, your exit equity, and transfers it to the hyperscalers. Sucks that it happened to you guys.
It was too late to stop it.
Then, Elastic whined about Amazon using Elastic under the open source license they used to build their product. They whined that Amazon wasn't contributing enough. So they switched the license to their product. So Amazon took over maintaining the open source software. Doing exactly what Elastic asked them to do.
Sorry, but everything about Elastic, and especially this most recent announcement of layoffs, scream "bad leadership".
AWS was super greedy and honestly I’m glad elastic even survived their aggressive tactics.
These executives are replaceable, and they would be replaced if they do not toe the line. In other words these executives happen to choose a easy and beneficial path rather than standing up for the long term right thing for the company.
I don’t think a lot of us employees will be happy to admit that AI is turning out to be a legitimate productivity aid that is allowing individuals to accomplish more work per person.
We’d rather sit here and stew about companies “blaming AI for layoffs” but I imagine that is only sometimes the case.
A somewhat related tangent: I have had the thought that many parts of the Japanese system of hiring for life might actually be really appropriate for the AI age. That system seems to result in a lot of companies finding ways to reshuffle employees into making some kind of product that has market value rather than the Western reaction that that seems to favor downsizing and focusing the company on a smaller set of markets in the name of ruthless efficiency. This seems to result in many Japanese firms making a wide breadth of interesting products at very high quality levels.
If your company is profitable because AI is increasing efficiency (allegedly, of course), why layoff 7% of your employees when you could instead assign them to make something new or complementary to your current product line? Western companies seem to refuse to do that out of a sense of focus and efficiency, but maybe giving that strategy a go more frequently would result in unrealized opportunities.
Growth companies respond to efficiency by asking "what can we do now that we can get more done."
Stagnant companies say "how can we cut costs."
The math is pretty simple. If you expect that doing more will have positive ROI, you do more; if you think your position is about as strong as it can ever be, and don't have ideas for growing the space or your spot in it, you assume that more spend on new things would be negative ROI.
And if you're stagnant and there are prevailing narratives giving you an excuse to cut costs without scaring investors into thinking you've lost optimism, you jump on it even if you haven't even verified if the productivity gains are real for your employees.
Judging by this CEO’s vapid post stuffed with meaningless LLMisms, and the condition of this company, the efficiency savings don’t seem to be there and are at best illusory.
Good luck to any companies who think they’re improving operations by jamming generative AI (or worse unreliable ‘agents’ based on the purported intelligence of GAI) into all sorts of processes where they don’t belong.
We’ll see over the next few years whether the 10x efficiencies are real or a mirage.
This is a terrible strategy. It encourages inefficiency to metastasize throughout the company.
No wonder Japan is stuck in a rut since the 90s and its debt-to-GDP ratio is 205% which is one of the highest in the world.
Your romantic idea of Japan would get destroyed by just browsing www.reddit.com/r/japanlife/
Japan has one of the worst work culture and low productivity in the world.
I also think that concepts like debt to GDP ratio are somewhat detached from corporate policies.
Corporate policies ultimately decide growth. More growth leads to higher profits and higher tax collected by the Government which in turn means they don't have to borrow more.
Don’t most companies think of layoffs as a last resort? I don’t think one ought to be embarrassed about correcting course when you have made a mistake. It takes courage.
Embarrassment should always be warranted when you make mistake on a scale where you are laying off a percentage of your work force instead of a couple of people.
Not that I would romanticize them as a whole, as a lot of aspects of Japanese corporate work culture are not to be envied.
You can crap on those investors. The answer then is to never take their money. But without money, the job probably wasn’t created in the first place. So the result is the same.
By the way, ever work alongside a really crappy non-executive and wonder how on earth they’re keeping their job? I sure have.
AI hardware costs are nothing compared to executives’ stock options too…
Everyone has their own problems and their own feelings. Their socioeconomic conditions do not invalidate them.
It's something like:
(A) To the public (e.g. prospects, customers, investors): "This is a good thing and we're going to be an even better bet!"
(B) To the remaining team: "This is tough and I feel your pain and will do better."
(C) To the laid off: "It's not you, it's me, thank you and good luck."
It's hard if not impossible to handle all three of these authentically, concisely, and in the same message. Which is why you can almost immediately find something not to like..
They can try to do better and be hopeful, but they also fucked up big time. It's not like the public actually believes the lie, so stop telling it.
Another commenter questioned what size bucket Elastic falls into these days; in April 2025 their SEC filing [2] cited about 3,500 employees. So not a startup any more but definitely not fully-fledged FAANG-sized.
(not sure whether it even applies here; but full disclosure, I left Elastic in 2022.)
[1]: https://www.elastic.co/blog/ceo-ash-kulkarni-email-to-elasti... [2]: https://www.sec.gov/Archives/edgar/data/1707753/000170775325...
I don't know what the best solution for the current healthcare clusterfuck in the US is, but I think disassociating health insurance from employer/employment is a great first step.
That should be the goal and once we have that, it will not matter if you are self employed or own a business. We keep doing half measures and pretend to be surprised when it doesn't work.
> On November 2, 2017, a bill later known as the Tax Cuts and Jobs Act was introduced by Representative Kevin Brady of Texas. Included in the bill was the move to change the tax penalty for not having health insurance mandated by the Affordable Care Act to zero.[62][63] Economists said this would lower interest in obtaining health insurance coverage.[64] The bill was signed into law on December 22, 2017 by Donald Trump,[65] with the loss of individual mandate taxation being set to take effect January 1, 2019.[62]
If you're generating benefits, there should be very few reasons you need to let go people massively.
As measured by ... purchasing power.
Let's take a look, Safety Index - US 50.8, Belgium 50.6. Health care index - Belgium 75.9, US 67.8, Pollution Index - US 36.7, Belgium 49.2, Climate index - Belgium 86, US 78.5.
As it stands US standard of living is better really only in "you can buy a larger house" (shocking, giving the relative size), and "it'll be slightly cheaper".
Not by any other metric.
It is an insult to the people that founded the country and people that developed science/tech/finance etc. in it. And ofc the space, natural resources and isolation from wars.
Saying US is rich because capitalism is about as accurate as saying it is rich because it is christian
You are talking about entirely different things. Makes no sense whatsoever. You could make your same argument about any economic system. The natural resources are inputs, not the outcome.
Yes. See Norway for example.
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
What I mean is those factors can obviously effect a country's success. And can be argued that that do much more easier than arguing about religion or ideology.
Similarly it is easier to argue that proper nutrition, sleep, drug usage etc. can effect an athlete's performance very positively. But you would find it much harder to argue on their religion, place they live, how wealthy were their family etc.
As another example I think it is pretty easy to argue that the Jewish scientists going to US because of Hitler was a massive gain for US and a massive loss for Germany. And there are so many concrete factors like this that, all things considered, ideology seems irrelevant in comparison.
You might say "this is all because US is capitalist in the first place". I want to point out how similar this kind of thinking is to the way some religious people think and how inconsequential it is in real world.
Take home is about the same after including health insurance and all the myriad taxes that US employees are subject to.
It's hard to imagine that this isn't a larger differentiator than the ability to fire hundreds at will.
Like, a while back my employer had 10% layoffs, and their most profitable year ever, in the same year. There’s a real reason why that happened, ans the reason is that the C suite seriously fucked up on managing the company’s finances. In a sane world they should be the first to bear the consequences. Instead they got fat bonuses while hundreds of people who had no part in creating the problem lost their jobs. And the moral justification for a society that allows this is somehow, “But isn’t it great that it’s easier for privileged people to play fast and loose like that?” That is, at best, circular reasoning.
Yup, and that way those people should be hired by companies who are in it for the long term and not looking just at the next quarter (and using hiring as a way to deny employees to competitors).
WHy wouldn't they do that? What type of notice ado you mean in this case?
This is not me advocating for either side but it’s one of the reasons most startups exist in a country like the US.
But SW can be much more easily disrupted, and if you can move faster and stay leaner than your EU competitors due to laxer laws, then you will win. SW success is often about time to market, not IP, since a lot of companies and countries can build a Airbnb, a Booking.com, a Spotify, etc there's no rocket science, they dominated because they were first to market but they can also be easily disrupted by other SW companies if they drop the ball and piss off their userbase as the cost of building SW is much cheaper than building an EU machine.
Also, there's a reason people can only name ASML as EU's shining examples but nothing else.
The U.S. is suffering from office worker bloat. They have an increasing growing population of people who know very little about physical labor and most likely won't be able to adapt to upcoming AI induced mass unemployment. I only see the pain getting worse for them.
Not sure what the solution is for them here.
The only social contract that is guaranteed is the one written into law. That's why we have government, but the problem is that the government is (for a while now) captive to / bought by large corporations, not responsive to employees/workers/voters.
Whatever principled social contract you may have thought large corporations upheld was smoke and mirrors. It just worked for enough of the right kind of person for a while.
My point is that the so called "social contract" has never been upheld by large corporations - it may have seemed that way at times but it was mostly self serving marketing, not anything that would influence their treatment of employees vs their shareholders and executives.
Furthermore I'm arguing that we shouldn't rely on them to uphold it. If we have a belief in what is universally fair or just (i.e minimum wages, no child labor, no slavery), we should encode it in law, not hope corporations find their conscience to renew the social contract.
Beyond that, "social contracts" benefit the powerful and have a tendency to turn a blind eye to the worst off. Does the "social contract" require me to be a white, college educated male to secure worker protections? If you need a clear example of this, consider the relationship between citizens and police in the United States, and how blind the majority has been to how fundamentally broken the "social contract" around policing has been for minorities. That's what a handshake-society looks like.
Granted having both might be nice, but relying on a social contract is like relying on a benevolent dictator. It's great until it's not.
If you have a very diverse society that operates on tribalism, then you need a strong rule of law with strong checks and bounds to weed out tribalism, but this doesn't come for free as policing and lawyering the behavior of all members of society to check if they aren't discriminating each other over immutable characteristics, is gonna costs the government and companies operating in this environment a lot of money, so you're gonna have higher operating costs.
Personally, I'm in favor of regulations and stiff penalties for employers who break them.
Change starts with regulation. That's how every other advanced economy handles it.
It's really not that complicated. It's the same situation as healthcare. You shouldn't rely on the free market to do anything other than maximize short term profits.
At the time I remember talking about this becoming a norm as CEOs follow the lead and getting downvoted heavily. Its unfortunate that we are here, but also not surprising, given how limited empathy people have for each other at times here on HN. Unless we stand for each other, this won’t change.
It is almost like the company really is just doing it to arbitrage or get rid of expensive (aka old) employees.
Yeah and psychology was considered unserious, computers were still new, civil rights was barely ten years old and most work was unskilled labor.
What is your point? Stop using "not how it was 50 years ago" as an argument because it isn't one.
I work in IT and when we needed something new we'd just implement or build it.
Now we have long certification processes for anything new, checking if it complies with hundreds of pages of policies. A lifecycle management program which we constantly have to keep updated. Governance teams that are constantly looking over our shoulders. All shit that has nothing to do with IT whatsoever.
As a result we spend 90% of time doing busywork jumping through hoops these guys set up for us. Only 5% is real technical work and a lot is outsourced or consulted out to a friend of the vice president who spends all day chatting in his office for 1000 bucks a day. Or a Deloitte guy who looks great in a suit and has no idea what he's talking about. Because companies hate employing people who have actual knowledge.
I really hate IT work now. Not sure about the rest of the industry but this change happened about 10 years ago. Until then we still were able to do actual useful work.
I can only imagine how awful a place to work it will become when they will use AI to dream up even more inhibiting policies to keep us down with.
Oh and meanwhile the CEO still goes around how innovative we are even though any innovation is absolutely killed by all this bureaucracy. Most of the time we come up with a great idea it doesn't move ahead because nobody wants to deal with years of pencil pushing to get it approved.
I can totally see how startups can do actual work with little money and we can't do anything.
- Small: < 100 employees
- Mid-sized: 100 - 1,500/2,000 employees.
- Large: > 1,500/2,000 employees.
See: <https://www.indeed.com/career-advice/career-development/busi...> <https://learn.g2.com/business-size>.
The US Bureau of Labour Statistics identifies nine classes of businesses for employment dynamics, the largest being 1,000 employees: <https://www.bls.gov/bdm/bdmfirmsize.htm>.
I'm surprised by the latter as there are many companies with > 10k employees.
The list of 100 largest US companies by headcount ends with Meta at 78,865 employees. The top ten have 309,000 or more employees, two (Walmart and Amazon) over 1 million. The top 5 are all retail, delivery, or both (Amazon).
“Because of AI” indeed.
In theory, a small layoff can target the least productive employees.
But this remains true after a layoff and the layoff often acts a motivator for your best employees to start looking even if they weren't previously.
Usually they aren't thinking "well, glad I survived that layoff and now my job is safe forever", they are thinking "huh, is this a sinking ship? Maybe I should look around and see what else is out there..."
...speaking as someone that has been at several companies during layoffs...
Large companies model attrition in their financials, and those assumptions start to break when macro conditions around the job market shift like that.
They lost a lot of goodwill back then. Some of their potential customers migrated to OpenSearch and never looked back, even after they backed down and went open-source again under AGPL.
The underlying message is a lot clear - they are a public company. They have to do this and more show to net positive income to keep the market value from falling further.
Companies can keep the employees with market value drop but it gets hard with negative income. Salesforce also lost ~37% value in last 5 years but they still print billions in net income every year.
The same story with companies like Gitlab. They lost 75% market value and negative income since going public.
Unionize, brothers and sisters!
Can someone help me understand why sales is immune to this strategy and still is employing the “more bodies” approach. I thought we were working smarter in 2026?
Wouldn't that suggest you need those workers more?
https://www.entrepreneur.com/business-news/nvidias-jensen-hu...
What's normal in USA for this size of company?
I think open source is important and fair use is important, but I’m skeptical of the business model of gutting open source by hosting it and reselling it wholesale with a few modifications.
Amazon, Google and Microsoft are getting rich just reselling hosted open source and actively competing with and gutting companies like Elastic.
It's never AI. In almost every case, companies that claim it's AI are doing so because reducing headcount due to "automating with AI" sounds better than the real reason, often over hiring, financial troubles and other reasons that might scare investors away.
The correct term is usually AI Washing.
More info: https://www.thehrdigest.com/what-is-ai-washing-and-why-has-i...
If they are in an outstanding position why did he make 7% of the employees lives miserable with a stroke of a pen.
:laughing:
> To do it, we're shifting our pace of innovation, simplifying how we operate, and investing in new skills. That's what this reorganization is for: a simpler structure, with fewer layers, less complexity, and less friction.
Translation: We're going to run the remaining people ragged.
> That means fewer layers, broader ownership, clearer accountability, and a sharper focus on the skills we believe matter most for what's ahead.
Yeah the people remaining are cooked.
It's never "we're going to hire more people to build lots of cool stuff" it's always giving fewer people quadruple the responsibility expectation.
Too bad, so bad?