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”]
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.
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.
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.
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.
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.
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.
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.
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.
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.
> 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.
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.)
> 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?
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[ 5.6 ms ] story [ 103 ms ] threadAI 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.
“Because of AI” indeed.
Granted, in that context, you'd be laying off 5% every two-ish years until industry trends changed direction.
If they are in an outstanding position why did he make 7% of the employees lives miserable with a stroke of a pen.
Wouldn't that suggest you need those workers more?
https://www.entrepreneur.com/business-news/nvidias-jensen-hu...
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.
: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.
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...
What's normal in USA for this size of company?
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?