Elastic lays off 7% of employees

https://www.elastic.co/blog/ceo-ash-kulkarni-announcement-to-elastic-employees

by dakrone • 28 days ago

237 220 28 days ago

puszczyk• 28 days ago

Makes me sad to read it as an ex-Elastic employee.

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...

ai_slop_hater• 28 days ago

I've grown to hate executives. This is obviously an AI-generated nothing burger. They never mean what they say publicly.

sandeepkd• 28 days ago

Do not want to sound like as if I am taking their side but the reality is that all these decisions are mandated by some subset of investors in one way or another.

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.

BobbyTables2• 28 days ago

An AI can also regurgitate others decisions, based on a much wider knowledge base than these executives.

AI hardware costs are nothing compared to executives’ stock options too…

twelve40• 28 days ago

this is a bit... general? there are companies with bullshit executives for sure, then there are companies who slay it.

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.

christophilus• 28 days ago

ex-Elastic here, too. It was a great place to work pre-IPO. It seems the culture has shifted a lot since the IPO, though.

echelon2• 28 days ago

Might've been better if AWS and GCP didn't steal your goodies and take so much meat off the bones.

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.

grey-area2• 28 days ago

What’s also sad is looking at the quotes you posted GAI was obviously used to churn it out - it’s a simulacrum of thought, signifying nothing. This is what the CEO is trying to claim will save the company, and unfortunately this is the sort of mediocrity relying on LLMs gives you.

ffsm8• 27 days ago

This is what the CEO is trying to claim will save the company

Maybe I'm misreading it, but I didn't get the "we're forced to do this" vibe, which "saving" would imply.

To be this reads more like a strategic reduction in workforce as the product has stabilized.

dzonga• 27 days ago

more “head count” in “go-to-market” roles

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.

nozzlegear• 28 days ago

This announcement spends remarkably few words talking about the what (7% of the company's workforce was laid off), and a great deal of words talking about how bright the future of the company is and how they're going to hire more people.

cyanydeez• 28 days ago

which is why most corporations should be classified as sociopaths, at a minimum.

lcnPylGDnU4H9OF• 28 days ago

Well, sort of. That anthropomorphizes them and allows the sociopaths running the corporations to pawn the responsibility of their decisions to the corporation, which is actually a legal fiction that is incapable of independent thought or expression.

yamillove6• 28 days ago

The corporation actually gave them a job.

KellyCriterion• 27 days ago

There is a movie which does this, trying to align to WHO ICD list:

The Corporation / 2003

https://en.wikipedia.org/wiki/The_Corporation_(2003_film)

Free to watch on YT, IIRC

skeeter20202• 28 days ago

If you were realigning your SaaS company to ignore your technology short-comings and technical debt, and isntead focus on selling as much "AI-enabled <whatever>" while the rush still looks like gold, this would be a great strategy & announcement.

brianwawok3• 28 days ago

Tech debt is much less important than many developers think it is. More sales over chasing tech debt almost every time.

mik3y• 28 days ago

Layoff announcements are this kinda tricky class of corporate comms where you need to speak to at least 3 different constituents, with 3 different messages, which are often in conflict.

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."

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..

jimt12342• 28 days ago

And all 3 messages have to be delivered within very strict legal guidelines, because someone's always gonna sue.

jorams• 28 days ago

There's really only a conflict between A and the rest, and that's because A is a lie. It's not a good thing, if it were they wouldn't have to say B and C.

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.

msteffen• 28 days ago

I wonder if some of these CEOs are anticipating a big crash and trying to lay people off now, so that (1) they can raise/hoard cash while the money-go-round is spinning and (2) their eng organization is already lean and used to it if/when the money-go-round stops.

“Because of AI” indeed.

kev0092• 28 days ago

I think it's just the relative cost of money. Credit, debt, raises, revenue all rely on it. The tech industry got used to zero interest rate and then Covid-era stimulus. Now, suddenly, cashflow matters, but the companies are still run by the same people that only know perception management. Eventually they too will get cycled out.

Ancalagon2• 28 days ago

not to mention SaaS stocks are down making the cost of borrowing against their stock more expensive

confidantlake• 28 days ago

Nah they are just following the herd. When everyone was hiring they hired, when everyone was firing they fired. Go along to get along.

SaucyWrong• 28 days ago

Funny, so many words used but my brain only hears, “I am currently mismanaging this company,” every time one of these layoffs occurs.

keithnz• 28 days ago

This just reaffirms my view is that big companies will lose headcount because of AI, but small and medium companies will (or at least have the potential to) leverage AI to do bigger and better things. This is because big companies could always spend big money on getting what they want made while small companies always have to tradeoff what they can realistically do with the resources they have.

wolvoleo• 28 days ago

Also big companies spend tons and tons of time and money on useless busy work.

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.

georgel• 28 days ago

This has been the case forever in corporate environments, even before AI. I worked for 3 years on an app that in startup land should have taken a couple months at best.

robwwilliams• 28 days ago

In academic research I have seen this same trend, particularly intensely in IT and security. Lock it down, lock it up, and slow down research. A hierarchy of admins and techs taught to cover their asses.

Macha• 28 days ago

Is elastic a big company? I’d put them somewhere between small and medium…

next_xibalba• 28 days ago

4,000 employees (pre layoff). That’s quite large.

dredmorbius• 28 days ago

Standards vary, but very roughly:

- 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/>

gortok• 28 days ago

I recommended an elastic demo for a client that would be well served by Elasticsearch. The Elastic sales folks completely torpedoed the presentation by trying to focus on their AI “capabilities” and not on the recommended talking points. This was 2 years ago.

enraged_camel• 28 days ago

So how many people? I can't find this info anywhere.

dakrone• 28 days ago

There were around 4000 employees before this announcement, so around 280 people affected.

bigyikes• 28 days ago

Why even bother with such a small layoff? Is there a reason to not just dial up your attrition for a while?

trgn6• 28 days ago

i dont understand this either. just dont hire for half a year or so, a generic globocorp gets to that 7% easily.

Avicebron2• 28 days ago

That doesn't boost the stock after the announcements, why would they do it?

mh-• 28 days ago

One challenge is that when the market stops hiring as aggressively, voluntary attrition retracts as well.

Large companies model attrition in their financials, and those assumptions start to break when macro conditions around the job market shift like that.

film42• 28 days ago

I've seen companies put a percentage of the team on a PIP as a "this is not a layoff but we do need to cut costs" situation. Hopefully Elastic is just being honest about it?

Legend2440• 28 days ago

Your best employees are the most likely to leave via attrition, because they have the most opportunity elsewhere.

In theory, a small layoff can target the least productive employees.

georgemcbay• 28 days ago

Your best employees are the most likely to leave via attrition, because they have the most opportunity elsewhere.

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...

SpyCoder772• 28 days ago

In human terms, this is not a small layoff. Around 281 people's lives are being shaken up by this.

r-w• 28 days ago

I think that might be even worse for the mental health of the folks on the ground.

tonyedgecombe7• 27 days ago

The anticipation is worse than the event itself.

jollyllama• 27 days ago

7%? Small? 10 years ago, 5% was significant, and that was in a fairly mature sector.

Granted, in that context, you'd be laying off 5% every two-ish years until industry trends changed direction.

tracerbulletx2• 28 days ago

Before the 1980s layoffs were seen as a massive failure of the company and almost never happened to tenured employees unless the company was collapsing. Before we are all made to think this is normal and unavoidable behavior.

zamadatix• 28 days ago

I wouldn't have nearly as many complaints about this mindset change if ones life (e.g. insurance) weren't still so deeply tied to who your current employer is.

jimt12342• 28 days ago

I'm aware that HN frowns on "THIS", but...THIS!!!

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.

Avicebron2• 28 days ago

I don't know how the social contract between employees/employers gets rebuilt..feels like it needs to though

danans2• 28 days ago

I don't know how the social contract between employees/employers gets rebuilt.

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.

jknoepfler3• 28 days ago

I don't think it's rational to rely on relationship with a business, especially and in particular a publicly traded business.

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.

yamillove6• 28 days ago

When you are making $250k or above you should not think the job someone gave you is some kind of God-given right.

nosioptar• 28 days ago

Employers will only do the right thing in two cases: they're afraid of stiff government penalties or they're afraid their workers are going to cut their heads off.

Personally, I'm in favor of regulations and stiff penalties for employers who break them.

heylook2• 28 days ago

You tax the everloving hell out of the rich, so they can't just buy whatever policy or judiciary outcome they want or build mega "just in case, i promise uwu" bunkers.

torben-friis2• 28 days ago

I know HN is mostly against regulation, but I'm very glad my country restricts mass firings, and particular stricter rules apply for companies that turn a profit.

If you're generating benefits, there should be very few reasons you need to let go people massively.

vanrysss• 28 days ago

I have a cousin in Belgium who was laid off following some restructuring and her severance was 52 weeks. Not out of the goodness of the company's hearts, but mandated by law since they gave no notice and she had accrued seniority. US labor laws are a joke in comparison.

wbl• 28 days ago

The Nordic countries provide income replacement and retraining instead. Labor market inflexibility locks out younger unproven workers.

ronnier• 28 days ago

HN is very much pro regulations of all types.

ReptileMan• 28 days ago

Limit mass firings and you are also limiting mass hirings.

Rekindle8090• 28 days ago

"Before the 1980s layoffs were seen as a massive failure of the company and almost never happened to tenured employees unless the company was collapsing. Before we are all made to think this is normal and unavoidable behavior."

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.

33MHz-i486• 28 days ago

the business people took over tech and somehow convinced us Jack Welch’s management philosophy (targeted attrition, layoffs for financial engineering) was a best practice even though he and his proteges drove numerous old guard tech companies into the ground

darth_avocado3• 28 days ago

When Elon fired 80% of the company, I remember a lot of celebration on HN. Some of it was the perceived political bias within the employees and some of it was “The app works fine what were all those employees doing? They probably deserved it.”

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.

monksy• 28 days ago

That's not from what I remember. I'm sure there was some skepticism about some of the roles that were there. But I do remember Ian Brown just completely dunking on that triobyte on Twitter Spaces. (Ian Brown is an ex-Twitter performance engineer, he pushed Musk on "what is non-performant, and you explicitly define it".. suffice to say gehot and Musk got a little embarassed and kicked him off the stream).

meerita2• 28 days ago

When that happened, AI wasn’t even at today’s level. Elon clearly didn’t fire those people because AI would replace them. They were laid off because the company could run pretty well without them. And that’s exactly what happened.

tonyedgecombe7• 27 days ago

It’s not that surprising there wasn’t much empathy when there was so much bragging about how much people were earning and that it would go on forever.

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.

outside1234• 28 days ago

The worst part about the current situation is that the company is then just turning around and hiring people.

It is almost like the company really is just doing it to arbitrage or get rid of expensive (aka old) employees.

cramer4next• 28 days ago

In the 80s you didn't have the majority of your employees being white collar and making six figures.

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.

manishsharan• 27 days ago

Also so many people with so many guns.

Mass Unemployment with no healthcare or supporting social services , very few opportunities and lots of guns.

It will not be ok.

phendrenad2• 28 days ago

The tech industry spawned a new type of Wall Street investor who thinks a stock is a high-interest savings account. There's no room for risk, you need to grow at exactly 3.141593% per quarter or you face the pitchforks-and-patagonia-vests threatening to take their money down the street to the next bank.

qwertyuiop_• 28 days ago

We're in an outstanding position and well-equipped for the future. I'm excited about the opportunities ahead and focused on making sure Elastic is positioned to lead in this next phase of innovation. - Ash Kulkarni"

If they are in an outstanding position why did he make 7% of the employees lives miserable with a stroke of a pen.

thayne• 28 days ago

Customer expectations are increasing and evolving faster than ever before

Wouldn't that suggest you need those workers more?

nobleach• 28 days ago

I'm sure now that they've right-sized the org, the leftover engineers + AI are really gonna grind out the best features. We should be seeing 10x any day now.

moron4hire• 28 days ago

Looks like Elastic has a lazy CEO

https://www.entrepreneur.com/business-news/nvidias-jensen-hu...

ygouzerh• 28 days ago

So true! It was the same for Gitlab, Cisco, Oracle... every-time they used the AI excuse to explain their laid-off, instead of explaining why they have bad financials. Actually, in all the cases above, the real reason when digging in the financials was the leadership and bad work culture...

coolid• 28 days ago

this should we do this or no this is not right

maxloh• 28 days ago

I wonder how much of the layoffs were caused by their license change in 2021.

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.

sergiotapia• 28 days ago

this requires us to move faster and operate leaner than we have before

: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.

SpyCoder772• 28 days ago

Saying 7% in this scenario is the wrong choice. It diminishes the absolute number of ~281 people who just had their lives shaken up by this.

tylerjl• 28 days ago

It's interesting to contrast this announcement with a similar post from the CEO in 2022 [1]: those past layoffs had much more of a victim-of-circumstances tone as ZIRP was beginning to dry up, but apparently those "bad times" versus "good times" during AI mania just accounts for a delta of +6% additional layoffs.

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...

delfugal• 28 days ago

For the good of the company we are reducing force by 7% even though those people we fired were instrumental in helping us grow. Insensitive PR tripe.

ronbenton• 28 days ago

Here's my translation of this announcement: https://layofftranslator.com/layoffs/2026-06-24-elastic/

Kiryous2• 27 days ago

dude, this is the work of a genius

khurs• 28 days ago

No mention of any details of the severance packages.

What's normal in USA for this size of company?

rootusrootus• 28 days ago

2-3 weeks per year of tenure

dirtbag__dad• 28 days ago

in some areas, especially customer-facing sales, we expect to keep adding to our teams to support future growth

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?

steelbrain2• 28 days ago

In the US at least, it is illegal to do unsolicited outbound sales with a bot. You have to have humans make these calls.

SoftTalker• 28 days ago

Interesting. I'm in the US and I get half a dozen calls a day from AI bots. Where can I report this criminal activity?

iwontberude• 28 days ago

lol everyone quit using elasticsearch for opensearch. Elastic use to be pretty cool but that was over ten years ago.

daft_pink• 28 days ago

I blame the hyperscalers not AI.

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.

tedggh• 28 days ago

Why are these decisions never easy?

chopete3• 28 days ago

Unfortunately Elastic lost -60.54% market value in the last 5 years. Negative net income every year since going public.

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.

slantedview• 26 days ago

Am I misunderstanding their current finances? On yahoo finance, I don't see net negative income for ESTC.

aussieguy1234• 28 days ago

The industry is changing. Advances in AI, automation, and technology are reshaping how work gets done, and we're changing with them

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...

vismit2000• 28 days ago

They should layoff everybody, close down the company, and just use postrgres full text search

Bombthecat• 28 days ago

Seven percent sounds about right what AI can replace

tonyedgecombe7• 27 days ago

The business has been losing money for years. Perhaps 7% is better than 100%.

elzbardico• 27 days ago

Right now if you're a open company, you have to keep a constant flow of layoffs in order to satisfy the wall street vampires.

I don't even blame the CEOs anymore, very few of them have the fortitude or the luxury of even being able to say: "Shut up stupid monkeys, I won't do layoffs to satisfy your urges this quarter, I don't want to fuck the long term value creation ability of this company just because you want a quick orgasm now".

Kiryous2• 27 days ago

Founders + dual class shares. Founder-CEO is much more likely to say that to investors, especially when the class A share give him 10x voting rights.

monicasarbu• 27 days ago

Ex-Elastic here. At Xata, we've built a company with many of the things we loved about Elastic's culture, and several former Elasticians are already on the team. We're currently hiring Backend Engineers, a Product Marketing Lead, and a Head of Product. If you're interested (or know someone who might be), send us a message!

alexk307• 27 days ago

Sad but you unfortunately need to make a profit as a public company at some point. In 8 years since going public, they've had essentially one marginally profitable year surrounded by lots of losses while growing to 4000 employees. Easy to blame AI when the fault is really poor leadership.

nipperkinfeet• 27 days ago

Bloated POS software. Kill it off.

Elastic lays off 7% of employees

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