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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...
Software engineers tend to put their heads in the sand, once a company/product reaches a certain maturity - it's the time for it to be milked. You need less product people - hence why most companies end up outsourcing to India etc, "A.I" is just outsourcing to "agents".
Now Salespeople - they can keep selling - and as long as they're willing buyers.
this is all part of the Product Maturity lifecycle.
One day the product stops being an attractive cash cow - then it gets sold to PE & finally dies or remains a zombie.
as an engineer - your job is to know where in the product lifecycle the company|product you're currently working on is.
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.
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.
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.
i hate to list the details because people start picking on details, but in my mind MS under Satya made a 180 from crap to relevant. All the while i realize what kind of shit goes on inside and if you read Blind your eyes will bleed. Yet Satya took it from a pure 100% bullshit executive and made it relevant. So not all executives are equal.
AI hardware costs are nothing compared to executives’ stock options too…
That said, I would also concede that over the past decade or two the clean code movement has made a damn strong effort of poisoning the term by trying to characterize technically inconsequential aesthetic concerns as technical debt.
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.
If you're generating benefits, there should be very few reasons you need to let go people massively.
This is not me advocating for either side but it’s one of the reasons most startups exist in a country like the US.
WHy wouldn't they do that? What type of notice ado you mean in this case?
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.
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.
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.
For what it’s worth I was one of the people questioning why they needed so many people although I never said those let go deserved it.
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).
<https://stockanalysis.com/list/most-employees/>
“Because of AI” indeed.
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.
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.
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?