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”]
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.
Elastic isn't Open Source though, they abandoned Open Source. It seems to me like this is an example of non-Open Source whatever licensing causing job loss. Or just plain bad leadership.
I feel so sorry for you guys. You've been totally fucked.
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.
It’s been five years since they changed their license. Today’s layoffs cannot be blamed on AWS and GCP. It’s been years and they have differentiated products now.
Big tech didn't steal anything. Elastic used open source software as the foundation of their product (specifically, Apache Lucene), and released their product as open source. The license allowed Elastic to do so, and likewise, the license Elastic used allowed "big tech" to use Elastics product. If it wasn't for open source, Elastic wouldn't exist.
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".
Don’t be a shill for big tech over elastic in this fight. AWS was using elastic’s trademark and aggressive advertising to push their managed elasticsearch. They left elastic with no economically logical choice. MongoDB and countless others also made similar choices.
AWS was super greedy and honestly I’m glad elastic even survived their aggressive tactics.
For the longest time, elastic didn't even have a cloud offering.
And by the time they did it was far far too late.
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.
It does actually. I am pro-OSS as sharing knowledge and innovation, I am not sure at this stage I am happy sharing my work with people using LLMs for anything... OSS gonna change for sure.
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.
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.
The thing is, a profitable company that sees an obvious efficiency staring it in the face is still going to take that efficiency.
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.
> 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.
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.
You are thinking growth in product and opportunities. But that doesn't always require or translate to more engineering especially in the face of AI efficiency if that work to support that growth can come from AI (NOTE: I'm not saying it can; I believe some people believe and are acting like it can which is enough). For these people the new bottleneck to growth may be new market segments, adoption and integration which could mean more sales like staff - AI seems more of a boon to the non technical, AI hypers and sales pitchers IMO than it is to engineers. On a side note personally this makes the industry less desirable to work in - it devalues effort/intelligence/craftsmanship/product and values connections, marketing, status and "the hustle" a lot more.
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.
Essentially what I am suggesting is companies leaving growth phase or who are generally “stagnant” to not just cut employee headcount but instead redeploy them to seek out new opportunities. This is especially true if the company isn’t facing any pressing financial crisis or net loss.
That’s why I said “many parts” and not “all.” I wouldn’t want to pick up a good number of their practices, but I think a company seeing layoffs as an embarrassing last resort is a positive trait.
I also think that concepts like debt to GDP ratio are somewhat detached from corporate policies.
> 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.
> but I think a company seeing layoffs as an embarrassing last resort is a positive trait.
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.
How many mistakes does it take to layoff 30% of your work force in a few months (Lucid)?
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.
> The thing is, a profitable company that sees an obvious efficiency staring it in the face is still going to take that efficiency.
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.
That’s not how it works. Investors don’t mandate operational decisions. That’s for… operators. What they do ask for, in exchange for their investment, are things like revenue growth or certain margins.
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.
most investors want maximum short term profit. execs have to do what they say because of fiduciary duty and shareholder votes to fire them. the only way to prevent it is use debt financing exclusively or make every investor sign a contract that limits the companies duty to "dont do things that will actively lose money". thats hard when a lot of vcs strategy is extract as much as possible and let it fall.
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.
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.
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."
(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..
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.
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.
I c-suites were actually held responsible for the actions of the corporation I would agree, but I don't see that actually happening very wrong. It is so rare that when it does happen it will be in the news for months.
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.)
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.
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.
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.
Improving coverage and acceptance by plans in the marketplace would be a good start. Multiple healthcare providers only accept plans from an employer or the state, not individual plans bought in the marketplace. Crazy that in a pro-business country, if you have your own business or you're self-employed, you can't have access to healthcare
The goal should be a single payer health care system.
I am not asking for like luxury spa five star treatment.
However, there definitely should be a
"free of cost at the point of service"
option that does not have any means testing
of any kind.
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.
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.
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.
vacationing/digital nomading in belgium atm, it looks erhm rich. traveling between brussels, leuven, ghent, bruges, soon antwerp... people dress well, never been anywhere with so many german luxury cars on the road, meals cost about the same as US.
I'm sure statistics this and that, but something doesn't translate, sanguine reality is different.
I've worked in the US and now in the Netherlands, and while I earn less in NL it would take a quadruple of what I used to earn in the US to willingly move back there, and even then I'd GTFO as soon as I possibly could. The US is great for getting an absurd amount of money fast, for basically everything else that matters in life I'll take anywhere in the EU over the US.
His little rant about "freedom" ended up aging poorly as most of the countries he lists as being more free have put serious limits on free speech since then. The most Soorkin screed he has written, might as well be John Galt's speech in Atlas Shrugged for how much its just the author inserting his political views.
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".
It is a delusion that US is rich because of capitalism.
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
Do you think those natural resources would have been taken advantage of as well in some other system? Same with the geography and isolation.
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.
> Do you think those natural resources would have been taken advantage of as well in some other system?
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.
Many of us see the existence of Elon Musk as a bug, not a feature. I am personally more and more converted to the idea that billionaires should not exist.
Really depends on the type of job. Software? You are making bank in the US and partly because companies in the US can move quick because of their labor laws.
Economics is hardly a reproducible science, but an American company has basically instant access to 350 million consumers (and workers) with no language barrier and little inter-state red tape.
It's hard to imagine that this isn't a larger differentiator than the ability to fire hundreds at will.
You would be surprised. Don’t think about it as firing but also being overly cautious. If you run a division in the EU you are overly thoughtful for every single HC you add. You don’t take risks because that HC at minimum is going to cost a year of severance. It’s a balancing act, maybe less new jobs but you get less layoffs.
Perhaps, but one does have to wonder why the US favors making life easier for founders and venture capitalists over making life more livable for people who aren’t already rich.
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.
>Would you rather they never hire those people? Because that is one option.
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).
This is a tough problem because it’s not always great. There is a reason companies largely (not all!) think twice about innovation, hiring and building out new facilities in European countries and part of that are those labor laws. So you miss out on upside but maybe it evens out on average.
This is not me advocating for either side but it’s one of the reasons most startups exist in a country like the US.
ASML is over 30 years old. It also has a massive IP and financial moat that's impossible to replicate by start-ups competitors seeking to disrupt it. Labor laws don't matter at this point as that's not the limiting factor, it's IP and capital.
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.
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.
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
> 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.
I was thinking the justice system, but yes the entire concept of government and law is built upon the monopoly of violence. Bringing it into this discussion is reductio ad absurdum. Even property rights are protected by the same monopoly (and even more directly).
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.
Yeah. There is no such thing, especially and in particular with publicly traded companies. The only meaningful way to change behavior is regulation.
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.
Social contracts only work in high trust societies that are also ethnically and culturally homogenous so the only grumble citizens have is fighting over class and not race.
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.
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.
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.
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.
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.
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.
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).
George Hotz’s entire tenure as a Twitter “intern” was so hilariously embarrassing. And the entire preamble at the time about basically “purging the parasites” and Heroic 100x Coders (the search still sucks)
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.
"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.
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.
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.
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.
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.
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).
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.
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.
Bingo - the combination of rising interest rates and tanking SaaS valuations has left a lot of these companies - specifically PE funded with mountains of debt - in a very weak position. Funny enough I think small SaaS companies are in a good position, both ownership & their potential use of AI, while larger SaaS companies, are in a lot of trouble. Why rent SaaS when you can build applications with AI? but then, who's going to maintain them?
As far as I understand companies will take out loans against their own stocks in good times as they expect their stocks to generally go up and to make more money than the payments on the interest of those loans. If their stocks go down they need to make up the shortfall elsewhere. The loans are generally used to keep business operations running smoothly irrespective of actual business cashflow (for example some businesses make most of their profits at certain times of the year). I'm not saying this for sure applies to Elastic but I believe its a pretty common pattern across major businesses.
dont know the laws well enough, but would be crazy indeed if companies could borrow against their own stock when they're issuing first new ones with sbc and then buy back on open market.
They carry $575m in debt, which is around 80-100 devs a year if they are paying something like 4.5% on it, ignoring tax write-offs on either case as well as equity comp. There is some calculus to all that, carrying some debt, doing buybacks, whatever other strategies to manage perceptions sure.
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.
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.
> 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...
yeah, it seems like it would have to be accompanied by a pay bump for the ones you really want to retain... which is challenging from an optics perspective.
Perhaps, but there are optics only when someone sees. It's not unusual to fund retention increases using some of the budget freed up by a layoff, but that won't be explicitly stated in a public announcement.
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?
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.
> 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?
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...
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 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.
> 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.
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.
> 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.
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...
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.
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.
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.
Elastic isn't Open Source though, they abandoned Open Source. It seems to me like this is an example of non-Open Source whatever licensing causing job loss. Or just plain bad leadership.
(Elastic employee here) Elastic is in fact open source again.
- 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...
I feel so sorry for you guys. You've been totally fucked.
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.
They switched from open source when big tech stole their goodies.
It was too late to stop it.
It’s been five years since they changed their license. Today’s layoffs cannot be blamed on AWS and GCP. It’s been years and they have differentiated products now.
Big tech didn't steal anything. Elastic used open source software as the foundation of their product (specifically, Apache Lucene), and released their product as open source. The license allowed Elastic to do so, and likewise, the license Elastic used allowed "big tech" to use Elastics product. If it wasn't for open source, Elastic wouldn't exist.
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".
Don’t be a shill for big tech over elastic in this fight. AWS was using elastic’s trademark and aggressive advertising to push their managed elasticsearch. They left elastic with no economically logical choice. MongoDB and countless others also made similar choices.
AWS was super greedy and honestly I’m glad elastic even survived their aggressive tactics.
For the longest time, elastic didn't even have a cloud offering. And by the time they did it was far far too late.
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 anti AWS rhetoric is exhausting.
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.
It does actually. I am pro-OSS as sharing knowledge and innovation, I am not sure at this stage I am happy sharing my work with people using LLMs for anything... OSS gonna change for sure.
I've grown to hate executives. This is obviously an AI-generated nothing burger. They never mean what they say publicly.
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.
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.
The thing is, a profitable company that sees an obvious efficiency staring it in the face is still going to take that efficiency.
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.
> 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.
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.
You are thinking growth in product and opportunities. But that doesn't always require or translate to more engineering especially in the face of AI efficiency if that work to support that growth can come from AI (NOTE: I'm not saying it can; I believe some people believe and are acting like it can which is enough). For these people the new bottleneck to growth may be new market segments, adoption and integration which could mean more sales like staff - AI seems more of a boon to the non technical, AI hypers and sales pitchers IMO than it is to engineers. On a side note personally this makes the industry less desirable to work in - it devalues effort/intelligence/craftsmanship/product and values connections, marketing, status and "the hustle" a lot more.
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.
Essentially what I am suggesting is companies leaving growth phase or who are generally “stagnant” to not just cut employee headcount but instead redeploy them to seek out new opportunities. This is especially true if the company isn’t facing any pressing financial crisis or net loss.
> many parts of the Japanese system of hiring for life
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.
That’s why I said “many parts” and not “all.” I wouldn’t want to pick up a good number of their practices, but I think a company seeing layoffs as an embarrassing last resort is a positive trait.
I also think that concepts like debt to GDP ratio are somewhat detached from corporate policies.
> 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.
> but I think a company seeing layoffs as an embarrassing last resort is a positive trait.
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.
How many mistakes does it take to layoff 30% of your work force in a few months (Lucid)?
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.
> The thing is, a profitable company that sees an obvious efficiency staring it in the face is still going to take that efficiency.
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.
I’d love to hire for life, but what commitment can an employee give? It can’t be one sided or it’s terrible.
The level of commitment to employees from Japanese corporations is astoundingly high compared to ones in the US.
Not that I would romanticize them as a whole, as a lot of aspects of Japanese corporate work culture are not to be envied.
Ok so get rid of the investors then.
Just get Dodge v. Ford Motor Co reversed.
That's what the pollution is for.
That’s not how it works. Investors don’t mandate operational decisions. That’s for… operators. What they do ask for, in exchange for their investment, are things like revenue growth or certain margins.
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.
most investors want maximum short term profit. execs have to do what they say because of fiduciary duty and shareholder votes to fire them. the only way to prevent it is use debt financing exclusively or make every investor sign a contract that limits the companies duty to "dont do things that will actively lose money". thats hard when a lot of vcs strategy is extract as much as possible and let it fall.
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…
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.
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.
Tech debt is much less important than many developers think it is. More sales over chasing tech debt almost every time.
Of course. But as an old sales guy used to tell me: "In the story, at the end the wolf shows up".
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."
(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..
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.
And all 3 messages have to be delivered within very strict legal guidelines, because someone's always gonna sue.
which is why most corporations should be classified as sociopaths, at a minimum.
The corporation actually gave them a job.
Look at what they make you give
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.
I c-suites were actually held responsible for the actions of the corporation I would agree, but I don't see that actually happening very wrong. It is so rare that when it does happen it will be in the news for months.
They have already done that when giving companies right as people which then takes responsibility off the CEO.
Funny, so many words used but my brain only hears, “I am currently mismanaging this company,” every time one of these layoffs occurs.
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...
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.
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.
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.
As a business owner yes please! Charge me a flat insurance tax. And then give everyone insurance. It’s such a cluster.
I’m always amazed that the US is as entrepreneurial as it is given the healthcare situation.
Improving coverage and acceptance by plans in the marketplace would be a good start. Multiple healthcare providers only accept plans from an employer or the state, not individual plans bought in the marketplace. Crazy that in a pro-business country, if you have your own business or you're self-employed, you can't have access to healthcare
The goal should be a single payer health care system. I am not asking for like luxury spa five star treatment. However, there definitely should be a "free of cost at the point of service" option that does not have any means testing of any kind.
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.
The U.S. already spends considerably more tax dollars per capita on health care than almost any other country, with much less to show for it.
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.
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.
I'm sure that level of overhead has nothing to do with the reason Belgian incomes, standards of living, and business outcomes are worse.
vacationing/digital nomading in belgium atm, it looks erhm rich. traveling between brussels, leuven, ghent, bruges, soon antwerp... people dress well, never been anywhere with so many german luxury cars on the road, meals cost about the same as US.
I'm sure statistics this and that, but something doesn't translate, sanguine reality is different.
I've worked in the US and now in the Netherlands, and while I earn less in NL it would take a quadruple of what I used to earn in the US to willingly move back there, and even then I'd GTFO as soon as I possibly could. The US is great for getting an absurd amount of money fast, for basically everything else that matters in life I'll take anywhere in the EU over the US.
Reminded me of https://youtu.be/ML3qYHWRIZk
His little rant about "freedom" ended up aging poorly as most of the countries he lists as being more free have put serious limits on free speech since then. The most Soorkin screed he has written, might as well be John Galt's speech in Atlas Shrugged for how much its just the author inserting his political views.
> standards of living
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.
How do you want to measure standards of living here?
It is a delusion that US is rich because of capitalism.
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
Do you think those natural resources would have been taken advantage of as well in some other system? Same with the geography and isolation.
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.
>Do you think those natural resources would have been taken advantage of as well in some other system?
Yes. See Norway for example.
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
> Do you think those natural resources would have been taken advantage of as well in some other system?
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.
When people like Elon Musk and Steve Jobs say they couldn’t have done what they did anyplace else in the world, capitalism seems like it is working.
Many of us see the existence of Elon Musk as a bug, not a feature. I am personally more and more converted to the idea that billionaires should not exist.
Now compare your cousin’s yearly salary in Belgium with the average salary of a US employee doing the same job.
>Now compare your cousin’s yearly salary in Belgium with the average salary of a US employee doing the same job.
Take home is about the same after including health insurance and all the myriad taxes that US employees are subject to.
Now you compare the all-in cost of living across salary, taxes, housing, healthcare, and everything else.
Really depends on the type of job. Software? You are making bank in the US and partly because companies in the US can move quick because of their labor laws.
This also a reason why starting a business in USA is usually better.
Economics is hardly a reproducible science, but an American company has basically instant access to 350 million consumers (and workers) with no language barrier and little inter-state red tape.
It's hard to imagine that this isn't a larger differentiator than the ability to fire hundreds at will.
You would be surprised. Don’t think about it as firing but also being overly cautious. If you run a division in the EU you are overly thoughtful for every single HC you add. You don’t take risks because that HC at minimum is going to cost a year of severance. It’s a balancing act, maybe less new jobs but you get less layoffs.
Perhaps, but one does have to wonder why the US favors making life easier for founders and venture capitalists over making life more livable for people who aren’t already rich.
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.
Would you rather they never hire those people? Because that is one option.
>Would you rather they never hire those people? Because that is one option.
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).
This is a tough problem because it’s not always great. There is a reason companies largely (not all!) think twice about innovation, hiring and building out new facilities in European countries and part of that are those labor laws. So you miss out on upside but maybe it evens out on average.
This is not me advocating for either side but it’s one of the reasons most startups exist in a country like the US.
And people wonder why there are zero companies in europe competing with american ones in the tech sector...
Tell that to ASML.
ASML is over 30 years old. It also has a massive IP and financial moat that's impossible to replicate by start-ups competitors seeking to disrupt it. Labor laws don't matter at this point as that's not the limiting factor, it's IP and capital.
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.
>since they gave no notice
WHy wouldn't they do that? What type of notice ado you mean in this case?
The Nordic countries provide income replacement and retraining instead. Labor market inflexibility locks out younger unproven workers.
HN is very much pro regulations of all types.
Limit mass firings and you are also limiting mass hirings.
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.
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
I don't know how the social contract between employees/employers gets rebuilt..feels like it needs to though
> 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.
What’s written into law is just “contract”, not “social contract”. Your argument is basically “if it’s not illegal it’s not wrong”.
No, he's arguing that if it's not legal, it's not enforceable by men with nightsticks.
I was thinking the justice system, but yes the entire concept of government and law is built upon the monopoly of violence. Bringing it into this discussion is reductio ad absurdum. Even property rights are protected by the same monopoly (and even more directly).
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.
Yeah. There is no such thing, especially and in particular with publicly traded companies. The only meaningful way to change behavior is regulation.
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.
Social contracts only work in high trust societies that are also ethnically and culturally homogenous so the only grumble citizens have is fighting over class and not race.
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.
When you are making $250k or above you should not think the job someone gave you is some kind of God-given right.
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.
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.
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.
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.
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.
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).
George Hotz’s entire tenure as a Twitter “intern” was so hilariously embarrassing. And the entire preamble at the time about basically “purging the parasites” and Heroic 100x Coders (the search still sucks)
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.
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.
"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.
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.
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.
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.
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.
Is elastic a big company? I’d put them somewhere between small and medium…
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/>
4,000 employees (pre layoff). That’s quite large.
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.
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.
not to mention SaaS stocks are down making the cost of borrowing against their stock more expensive
Bingo - the combination of rising interest rates and tanking SaaS valuations has left a lot of these companies - specifically PE funded with mountains of debt - in a very weak position. Funny enough I think small SaaS companies are in a good position, both ownership & their potential use of AI, while larger SaaS companies, are in a lot of trouble. Why rent SaaS when you can build applications with AI? but then, who's going to maintain them?
but none of this applies to elastic. it's cash flow positive, and has such a cash hoard it's doing stock buybacks.
As far as I understand companies will take out loans against their own stocks in good times as they expect their stocks to generally go up and to make more money than the payments on the interest of those loans. If their stocks go down they need to make up the shortfall elsewhere. The loans are generally used to keep business operations running smoothly irrespective of actual business cashflow (for example some businesses make most of their profits at certain times of the year). I'm not saying this for sure applies to Elastic but I believe its a pretty common pattern across major businesses.
dont know the laws well enough, but would be crazy indeed if companies could borrow against their own stock when they're issuing first new ones with sbc and then buy back on open market.
They carry $575m in debt, which is around 80-100 devs a year if they are paying something like 4.5% on it, ignoring tax write-offs on either case as well as equity comp. There is some calculus to all that, carrying some debt, doing buybacks, whatever other strategies to manage perceptions sure.
Tech companies use RSUs to game the accounting system and then have to do stock buybacks to keep the outstanding shares in line.
yep, clearly, just meant they're not cash strapped.
Nah they are just following the herd. When everyone was hiring they hired, when everyone was firing they fired. Go along to get along.
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.
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.
Here's my translation of this announcement: https://layofftranslator.com/layoffs/2026-06-24-elastic/
Why even bother with such a small layoff? Is there a reason to not just dial up your attrition for a while?
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.
> 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...
yeah, it seems like it would have to be accompanied by a pay bump for the ones you really want to retain... which is challenging from an optics perspective.
Perhaps, but there are optics only when someone sees. It's not unusual to fund retention increases using some of the budget freed up by a layoff, but that won't be explicitly stated in a public announcement.
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?
In human terms, this is not a small layoff. Around 281 people's lives are being shaken up by this.
I think that might be even worse for the mental health of the folks on the ground.
i dont understand this either. just dont hire for half a year or so, a generic globocorp gets to that 7% easily.
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.
That doesn't boost the stock after the announcements, why would they do it?
i dont think this announcement will boost the stock either, for the same reason we are wondering here why 7% is noteworthy for a globocorp.
Seven percent sounds about right what AI can replace
No way to prevent this says workers of only country where this regularly happens.
Unionize, brothers and sisters!
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.
> 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?
In the US at least, it is illegal to do unsolicited outbound sales with a bot. You have to have humans make these calls.
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?
I'm not from the US, but based on my knowledge of your culture, it may be worth it to write a letter to your state's Attorney General
> Customer expectations are increasing and evolving faster than ever before
Wouldn't that suggest you need those workers more?
They should layoff everybody, close down the company, and just use postrgres full text search
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.
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.
Looks like Elastic has a lazy CEO
https://www.entrepreneur.com/business-news/nvidias-jensen-hu...
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...
No mention of any details of the severance packages.
What's normal in USA for this size of company?
2-3 weeks per year of tenure
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.
So how many people? I can't find this info anywhere.
There were around 4000 employees before this announcement, so around 280 people affected.
Why are these decisions never easy?
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.
> 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...
lol everyone quit using elasticsearch for opensearch. Elastic use to be pretty cool but that was over ten years 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.
this should we do this or no this is not right
> 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.
I'm sure these workers signed up to the "free market principles".
Too bad, so bad?