Posted by dakrone 23 hours ago
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.
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.
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.
- Was originally open source Apache license
- Switched to non-open source Elastic license in Jan 2021 [^1]
- Switched to open source AGPL license in Aug 2024 [^2]
Not to defend the license change(s).
[1] https://www.elastic.co/blog/licensing-change
[2] https://www.elastic.co/blog/elasticsearch-is-open-source-aga...
You should have started with the Elastic license and kept it.
Because you switched in 2021, it was too late to stop Amazon and Google from fucking you and stealing your hard work, and even going so far as stealing your name and marketing.
Then the pro-hyperscaler "OSS purists" pulled out their pitchforks and called the Elastic license evil. As fucking if.
It seems plausible the people protesting your Fair Source license work for AWS, have stock in AWS, or just want to cause you grief because they know they have you cornered. They already have an OSI pure version of your product and you're stuck between a rock and a hard place with no real leverage to maximize the return in your core product and labor.
Such a shitty place to be stuck in. That's why other, newer database vendors start as Fair Source from day one. Or just stay entirely proprietary.
Switching back to appease the angry mob happened because too much of the "open source community" doesn't understand how much they're getting fucked over by big tech. They see you guys as the evil ones, which is totally wrong. You're the ones being reverse Robin Hooded.
Why isn't AWS itself open source? It encrusted a lot of OSS infrastructure. Why do they get to steal your product and make more money than your company on your labor? Same with Redis and all the other stuff they stole.
Let me rephrase that - why do they get to directly put their grubby hands into your rightfully earned revenue stream? One which should be yours entirely? Why do they get to suffocate your company's decade plus of hard work and pilfer those cloud revenue streams for themselves?
And all of this is stealing. Because they're wrapping stuff other people and other companies built in a proprietary ecosystem offering meanwhile starving the original authors of oxygen. Just because the letter of the OSI law doesn't say that doesn't mean that isn't exactly what's up. They're the ones who authored the rule book.
This world should be more pro-startup, pro-smaller company. As an ethos and as a means of maximizing return on labor. But the ICs in this space seem to pledge allegiance to the giants that are doing their careers the most harm.
Elastic layoffs happened because Amazon and Google choked you to death. Amazon and Google layoffs happen because they're commoditizing the labor force and using their might to devalue labor.
To everyone else who clings to OSI and open source purism - do you guys know who wrote the OSI and sits on the board? It's literally right in front of your eyes.
Big tech is stealing from you, devaluing your careers, and in the same breath demanding that you license over your labor to them for free. They're killing startups left and right, leaving no oxygen left in the ecosystem, moving into healthy industries and dumping on them in search of endless growth, and they're destroying society (tracking, attestation, age verification, platformization, the algorithm making everyone insane, etc.) to maximize their own profits.
We've got twenty six years of regulatory capture and lax antitrust enforcement to blame for this. They bought the regulators. OSI purism is how they pulled the shroud over your eyes - without paying you - to keep you blind to what an invasive species they have become.
The idea behind free software was the software was free, but you'd sell the support -- installation help (floppies even)
Elastic were on board with that, and it worked
Until a larger incumbent decided to do their own support (fine), but then sell their service.
Not even a price thing. Far easier for me to spend $50k a year with aws than $5k a year with elastic because we already have a relationship and framework with aws.
They've switched to AGPL, which is a great license, they were just too late, they're the poster child of why AGPL is so important (whether it's another or not is another question)
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.
In the early days AWS elastic offering was very weak. It had lots of foot guns and operational problems. We tried hard to use an more native elastic offering and would have preferred it, but it didn't exist.
The fact AWS crappy hosted ES gained any market share is more a testament to how bad ES sales practices were than anything else.
ES really missed the mark by not having a simple, self-serve sales model and instead going all in convoluted "contact a sales rep" enterprise model no one wanted to deal with.
Dozen of hours of useless phone calls, and just nonsensical numbers coming out weeks or months later. Only to go back to the well and try again with a new team of reps after the first team inevitably churned out before any real progress was made.
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.
As the supply curve of software becomes more vertical due to AI the argument that growth equals a proportional amount of engineering demand may be violated. We may see 2x growth in some companies even as the "people engineers" are cut. They could still be pursuing growth; it just that engineering costs are now lower or are less of a need to pursue that growth in general.
AI is the first technology that I've seen that has potentially hurt technology engineering demand rather than creating it; which is why the usual arguments don't always apply here.
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.
Corporations in the US don’t have any negative impact when laying people off. They have minimal to zero financial obligations to employees and essentially zero meaningful regulations on the matter.
From the employee perspective the admission of a “mistake” in this regard is not “courage,” it’s an admission of cold-heartedness.
To the company, you are nothing but a purchase order, and your livelihood is meaningless.
Maybe someone would say “of course, it’s a business, that’s logical.” Maybe you would even say “easy to fire, therefore, easy to hire, more innovation.”
I say, we don’t have to run society that way, and it’s not a pleasant way to live. It was a choice.
I say this as someone with personal experience getting laid off twice in a row within the last decade. One time the layoff was in the same month I was hired. That was not fun.
These aren’t “mistakes,” these are companies who treat people like disposable lab rats. My whole team was hired as an experiment and quickly let go when it didn’t work out. The company doesn’t just “make a mistake” and find out they suddenly can’t pay the people they hired that quickly. They knew they were playing us.
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.
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.
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…
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.
Everyone has their own problems and their own feelings. Their socioeconomic conditions do not invalidate them.
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.
The Corporation / 2003
https://en.wikipedia.org/wiki/The_Corporation_(2003_film)
Free to watch on YT, IIRC
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]
They can, hence the mandates for healthcare.
> What’s next? Forcing you to use protection during intimate activities?
If you start creating negative externalities for everyone else, then yea.
If you are arguing from a libertarian perspective of you can do whatever you want, then I would demand you get a tattoo saying “do not give me medical aid” prominently on your forehead so my taxes aren’t wasted on someone who doesn’t want to contribute to society but expects aid from society.
If you are are cool with that deal I am actually ok with you, but don’t be surprised if we drop your body into a Zoroastrian Tower of Silence the moment you go unconscious from a car accident and can’t pay for medical expenses.
If you're generating benefits, there should be very few reasons you need to let go people massively.
I'm sure statistics this and that, but something doesn't translate, sanguine reality is different.
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.
Maybe it works out on average but there are distinct pros and cons. On the net you get less job creation, less innovation and on the flip employees have more protection from being fired.
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.
because US government is more controlled by business interests than population voting power.
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).
Also you can always move to the UK. I hear they give you free housing and a stipend especially if you come from certain religions or regions.
Eisenhower: "If you want total security, go to prison. There you're fed, clothed, given medical care and so on. The only thing lacking is freedom.”
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.
I would add Hetzner as an example that EU labor laws are no obstacle to being competitive with US companies.
Like wich? Does it count that a lot of their shareholders and managers are in the US? Does it count that Apple music can do the same thing as Spotify and that Booking has loads of competitors that do the same thing? They have no technical moat other than being first to the market. ASML does have a moat.
>I would add Hetzner as an example that EU labor laws are no obstacle to being competitive with US companies.
Sure, but Hetzner is a dust spec compared to AWS, virtually irrelevant outside of EU/Germany. They also came to the market much later than AWS once building a hyperscaler became more of a commodity.
One one hand, lax labor laws means you can be first to market and capture most of it before the EU can wake up from their 3 month holiday and decide to pivot but can't because unions are blocking it. See VW.
On the other, Austria has very lax labor laws around firing people, similar to US and they have next to no big tech companies so that's not the entire formula. You also need the VC capital of Sequoia and AZ16 which doesn't exist in Austria, you need the scale which doesn't exist in Austria, the low tax caproate environment which doesn't exist in Austria, and a small government regulatory environment which doesn't exist in Austria.
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.
Mass Unemployment with no healthcare or supporting social services , very few opportunities and lots of guns.
It will not be ok.
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.
But 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. Which is why it's so much cheaper for US companies to hire in places like central europe where your payroll expense are mostly ICs and you don't need auxiliary armies of diversity consultants like in the US.
Basic labor regulation around hiring/firing has nothing to do with diversity. It has everything to do with basic labor regulation around hiring/firing. Sure, regulation is expensive. There's no special reason the United States can't foot that bill and every other Western European economy can.
What on earth do diversity consultants have to do with prohibiting opportunistic layoffs to maximize short-term profits?
I was talking about white collar labor, not factory work, but yes, that also applies there as well.
>Basic labor regulation around hiring/firing has nothing to do with diversity.
It does when some poor performers you want to fire are part of a minority protected group and can sue you even if you're not firing them because they're minorities but because they're bad at their job, it's gonna cost you extra to avoid fake discriminatory lawsuits. Then hiring abroad becomes a better idea.
>every other Western European economy can.
Because in places like central europe you don't need them so you save money on payroll, as there's no bitching over "diversity", every worker is the same so there's no chance of "i've been discriminated because of my skin color, I'm gonna sue you for millions"
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.
Unfortunately that’s what managers, executives and investors are doing everywhere now. Everyone Should’ve been more careful with the reactions when the status quo was upended.
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.
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 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.