Makes me sad to read it as an ex-Elastic employee.
AI is used to justify the redundancies, and the company still expects to grow in this fiscal year. In the SEC filling the specifically mention more “head count” in “go-to-market” roles [1].
> a reduction of approximately 7% of our workforce
> Advances in AI, automation, and technology are reshaping how work gets done, and we're changing with them. (…) That's what this reorganization is for: a simpler structure, with fewer layers, less complexity, and less friction.
> The changes we announced today are a sign of confidence in the business, not a retreat from it. We continue to invest in key growth areas and expect total headcount to grow year-over-year this fiscal year [the SEC filling says “ The Company plans to continue hiring in key strategic areas and locations, including continuing to grow headcount in
customer-facing go-to-market functions, and expects total headcount to grow this fiscal year compared to last fiscal year, as it continues to invest in future
growth opportunities”]
Software engineers tend to put their heads in the sand, once a company/product reaches a certain maturity - it's the time for it to be milked. You need less product people - hence why most companies end up outsourcing to India etc, "A.I" is just outsourcing to "agents".
Now Salespeople - they can keep selling - and as long as they're willing buyers.
this is all part of the Product Maturity lifecycle.
One day the product stops being an attractive cash cow - then it gets sold to PE & finally dies or remains a zombie.
as an engineer - your job is to know where in the product lifecycle the company|product you're currently working on is.
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.
The idea behind free software was the software was free, but you'd sell the support -- installation help (floppies even)
Elastic were on board with that, and it worked
Until a larger incumbent decided to do their own support (fine), but then sell their service.
Not even a price thing. Far easier for me to spend $50k a year with aws than $5k a year with elastic because we already have a relationship and framework with aws.
They've switched to AGPL, which is a great license, they were just too late, they're the poster child of why AGPL is so important (whether it's another or not is another question)
It’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.
ES Enterprise Sales for an on-prem license might have been the worst sales experience I ever was part of as a customer. We were already a very technically self-sufficient org just wanting to get under a support contract. They made it so impossible to give them money we simply gave up and went with the open source fork during all the Amazon kerfuffle.
Dozen of hours of useless phone calls, and just nonsensical numbers coming out weeks or months later. Only to go back to the well and try again with a new team of reps after the first team inevitably churned out before any real progress was made.
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.
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.
Corporate policies can’t make people have babies, decide how much money to spend on public infrastructure, make foreign policy decisions, tell national banks how to lend, etc.
> 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.
Corporations in the US don’t have any negative impact when laying people off. They have minimal to zero financial obligations to employees and essentially zero meaningful regulations on the matter.
From the employee perspective the admission of a “mistake” in this regard is not “courage,” it’s an admission of cold-heartedness.
To the company, you are nothing but a purchase order, and your livelihood is meaningless.
Maybe someone would say “of course, it’s a business, that’s logical.” Maybe you would even say “easy to fire, therefore, easy to hire, more innovation.”
I say, we don’t have to run society that way, and it’s not a pleasant way to live. It was a choice.
I say this as someone with personal experience getting laid off twice in a row within the last decade. One time the layoff was in the same month I was hired. That was not fun.
These aren’t “mistakes,” these are companies who treat people like disposable lab rats. My whole team was hired as an experiment and quickly let go when it didn’t work out. The company doesn’t just “make a mistake” and find out they suddenly can’t pay the people they hired that quickly. They knew they were playing us.
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 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.
This seems kind of weirdly confrontational? Elastic was founded by the guy who created elasticsearch. Why shouldn't he make a living selling services around the software he created? This is a terrific success story!
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.
I’ve seen many products die sudden, violent deaths due to unmanaged technical debt. If you have customers who care about quality and reliability, you simply cannot set up a false dichotomy between selling product and managing technical debt.
That said, I would also concede that over the past decade or two the clean code movement has made a damn strong effort of poisoning the term by trying to characterize technically inconsequential aesthetic concerns as technical debt.
“Chasing tech debt” vs “more sales” is a false dichotomy. A dangerous one, too, if you simply expand “chasing tech debt” to “listening to engineering concerns”. That’s how you end up with a Boeing.
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.
> On November 2, 2017, a bill later known as the Tax Cuts and Jobs Act was introduced by Representative Kevin Brady of Texas. Included in the bill was the move to change the tax penalty for not having health insurance mandated by the Affordable Care Act to zero.[62][63] Economists said this would lower interest in obtaining health insurance coverage.[64] The bill was signed into law on December 22, 2017 by Donald Trump,[65] with the loss of individual mandate taxation being set to take effect January 1, 2019.[62]
Well, the government cannot compel you to buy a product for your own protection. What’s next? Forcing you to use protection during intimate activities?
> Well, the government cannot compel you to buy a product for your own protection.
They can, hence the mandates for healthcare.
> What’s next? Forcing you to use protection during intimate activities?
If you start creating negative externalities for everyone else, then yea.
If you are arguing from a libertarian perspective of you can do whatever you want, then I would demand you get a tattoo saying “do not give me medical aid” prominently on your forehead so my taxes aren’t wasted on someone who doesn’t want to contribute to society but expects aid from society.
If you are are cool with that deal I am actually ok with you, but don’t be surprised if we drop your body into a Zoroastrian Tower of Silence the moment you go unconscious from a car accident and can’t pay for medical expenses.
Obama was a corporate stooge and neoliberal fuckhead who had majority in the senate and the house and spent his time fighting to pass a republican health care bill and wage illegal wars. I am a democrat but never ever will fall for that trick again. A fool can’t get fooled again.
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.
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".
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.
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.
They are laid off (with severance) not permanently disabled. They most likely will find other jobs (linkedin is already full of recruiting messages). I don't intend to make light of it - getting fired sucks, a lot. It's a terrible experience. But it should be also kept in perspective - software engineers, especially in the US, are very well paid, even in comparison with most other US employees. Compared to, say, Belgium, probably 2x and more. You can say living in a welfare state makes up to it, that's a matter of opinion and preference, but if you look just at the numbers, even with layoffs taken into account, I think US software engineers are quite well paid.
As an extreme example, if Elon got fired from Tesla, I am sure he would be ok. He manages his money well and I am sure he does not think his job at Tesla is some king of God-given lifetime human right. If you are making $250k, a company is not expecting to be your baby sitter. You are a grown man or woman.
An employee needs to manage their economic life without depending on some company to make financial decisions for them. Getting laid off is simply part of life.
If you don’t want to be laid off, you can always start your own company and hire all these people, with your own money of course.
Are you aware for well over a decade US software engineers have been compensated many multiples compared to their counterparties outside of the US? 7% is around 280 employees.
Just because companies are holding layoffs does not mean software engineers are not still making bank.
No, that's not true. Most companies offer at least HDHP plans either fully covered or at minimal cost. HDHP plans, by nature, have high deductibles and out-of-pocket maximums, but usually well under $10k per year. So for a typical case, unless there's some catastrophic expense not covered by any insurance, the difference can't be more than $10k per year. The difference between typical compensation for a seasoned SW engineer is much more than that, even before taking options & stock into account. In the US $150-200k is pretty common for a seasoned engineer. In Belgium, you'd look at around E100-110k from what I could find online. And I don't think Belgium has lower tax burden overall. So the health insurance alone doesn't come close to covering the gap.
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.
That’s right but depending on country there may be other legal requirements necessary so the costs tend to add up quickly and on average when you peak behind the curtains at an EU company you see it’s often easier to retain low performing members than it is to go through legal expenses and the notice period. You tend to be more thoughtful if you want to add HC on that region and avoid restructuring the company.
Maybe it works out on average but there are distinct pros and cons. On the net you get less job creation, less innovation and on the flip employees have more protection from being fired.
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).
I don't think there exists a company (at least in the US, in Asia they do have "lifetime employment" system even though that gets eroded too) that can promise it will never have a layoff. Did you know any such company that when it hires you it would tell you "we're here for the long term so you will never laid off, no matter what"?
It’s not like countries that decided against kleptocracy are drowning in unemployment. On the contrary, they often enjoy a happier population, a better standard of living, or both.
Well, millions of people risk their lives to come to the USA. There is a reason for that. While many come to be takers and abuse the system, many come because of the freedom to take care of your own destiny without expecting someone else to take care of their lives.
> 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.
because US government is more controlled by business interests than population voting power.
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.
>booking.com is in NL, and Spotify in SE. Both outcompeted quite some US competitors.
Like wich? Does it count that a lot of their shareholders and managers are in the US? Does it count that Apple music can do the same thing as Spotify and that Booking has loads of competitors that do the same thing? They have no technical moat other than being first to the market. ASML does have a moat.
>I would add Hetzner as an example that EU labor laws are no obstacle to being competitive with US companies.
Sure, but Hetzner is a dust spec compared to AWS, virtually irrelevant outside of EU/Germany. They also came to the market much later than AWS once building a hyperscaler became more of a commodity.
One one hand, lax labor laws means you can be first to market and capture most of it before the EU can wake up from their 3 month holiday and decide to pivot but can't because unions are blocking it. See VW.
On the other, Austria has very lax labor laws around firing people, similar to US and they have next to no big tech companies so that's not the entire formula. You also need the VC capital of Sequoia and AZ16 which doesn't exist in Austria, you need the scale which doesn't exist in Austria, the low tax caproate environment which doesn't exist in Austria, and a small government regulatory environment which doesn't exist in Austria.
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.
Are you seriously suggesting that the reason it is cheaper to shift factory labor from the United States to Mexico or Vietnam is because Mexican/Vietnamese factories don't need to hire diversity consultants? I have to have misunderstood what you're arguing, because that's transparently ridiculous.
Basic labor regulation around hiring/firing has nothing to do with diversity. It has everything to do with basic labor regulation around hiring/firing. Sure, regulation is expensive. There's no special reason the United States can't foot that bill and every other Western European economy can.
What on earth do diversity consultants have to do with prohibiting opportunistic layoffs to maximize short-term profits?
>Are you seriously suggesting that the reason it is cheaper to shift factory labor from the United States to Mexico or Vietnam is because Mexican/Vietnamese factories don't need to hire diversity consultants?
I was talking about white collar labor, not factory work, but yes, that also applies there as well.
>Basic labor regulation around hiring/firing has nothing to do with diversity.
It does when some poor performers you want to fire are part of a minority protected group and can sue you even if you're not firing them because they're minorities but because they're bad at their job, it's gonna cost you extra to avoid fake discriminatory lawsuits. Then hiring abroad becomes a better idea.
>every other Western European economy can.
Because in places like central europe you don't need them so you save money on payroll, as there's no bitching over "diversity", every worker is the same so there's no chance of "i've been discriminated because of my skin color, I'm gonna sue you for millions"
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.
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.
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.
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.
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.
You’re missing the point. You’re still holding on to the notion that somehow getting rid of people was fine because the company could run well without them (that’s debatable but it’s a tangent). The same logic is being applied now with AI. Doesn’t matter there was no AI back then or how good/bad AI is. People are being laid off and the companies are doing fine. You can’t cheer one and then complain about the other.
> You’re still holding on to the notion that somehow getting rid of people was fine because the company could run well without them
Yes? It's not an adult daycare. It's a commercial company. The premise is you are employed because you contribute to the functioning and the profitability of the company. If it's not the case, well, it sucks but you can't expect to be paid just for warming your seat. I mean, I wouldn't object somebody giving me six figures just for existing, but I hardly can expect and feel entitled for that to happen?
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)
> I was one of the people questioning why they needed so many people
Unfortunately that’s what managers, executives and investors are doing everywhere now. Everyone Should’ve been more careful with the reactions when the status quo was upended.
"We all know people are overpaid for doing nothing, but if we don't talk about it somehow it would continue forever"? Doesn't sound like a smart strategy to be honest. The truth will come out.
"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.
The interesting thing is how different outwardly similar businesses can be. I remember doing back to back contracts for two similar sized pharmaceutical companies. One of them had an IT group ten times the size of the other. You can guess which project overran.
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.
Ex-Elastic here. At Xata, we've built a company with many of the things we loved about Elastic's culture, and several former Elasticians are already on the team. We're currently hiring Backend Engineers, a Product Marketing Lead, and a Head of Product. If you're interested (or know someone who might be), send us a message!
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 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.
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.
> 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.
Sad but you unfortunately need to make a profit as a public company at some point. In 8 years since going public, they've had essentially one marginally profitable year surrounded by lots of losses while growing to 4000 employees. Easy to blame AI when the fault is really poor leadership.
> 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?
> 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 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.
Right now if you're a open company, you have to keep a constant flow of layoffs in order to satisfy the wall street vampires.
I don't even blame the CEOs anymore, very few of them have the fortitude or the luxury of even being able to say: "Shut up stupid monkeys, I won't do layoffs to satisfy your urges this quarter, I don't want to fuck the long term value creation ability of this company just because you want a quick orgasm now".
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.
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...
>more “head count” in “go-to-market” roles
Software engineers tend to put their heads in the sand, once a company/product reaches a certain maturity - it's the time for it to be milked. You need less product people - hence why most companies end up outsourcing to India etc, "A.I" is just outsourcing to "agents".
Now Salespeople - they can keep selling - and as long as they're willing buyers.
this is all part of the Product Maturity lifecycle.
One day the product stops being an attractive cash cow - then it gets sold to PE & finally dies or remains a zombie.
as an engineer - your job is to know where in the product lifecycle the company|product you're currently working on is.
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.
> This is what the CEO is trying to claim will save the company
Maybe I'm misreading it, but I didn't get the "we're forced to do this" vibe, which "saving" would imply.
To be this reads more like a strategic reduction in workforce as the product has stabilized.
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.
It was.
The idea behind free software was the software was free, but you'd sell the support -- installation help (floppies even)
Elastic were on board with that, and it worked
Until a larger incumbent decided to do their own support (fine), but then sell their service.
Not even a price thing. Far easier for me to spend $50k a year with aws than $5k a year with elastic because we already have a relationship and framework with aws.
They've switched to AGPL, which is a great license, they were just too late, they're the poster child of why AGPL is so important (whether it's another or not is another question)
(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...
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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.
ES Enterprise Sales for an on-prem license might have been the worst sales experience I ever was part of as a customer. We were already a very technically self-sufficient org just wanting to get under a support contract. They made it so impossible to give them money we simply gave up and went with the open source fork during all the Amazon kerfuffle.
Dozen of hours of useless phone calls, and just nonsensical numbers coming out weeks or months later. Only to go back to the well and try again with a new team of reps after the first team inevitably churned out before any real progress was made.
Yup. And I bet all that got reported internally within Elastic was how AWS was "undercutting them on deals".
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.
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.
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> 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.
Corporate policies can’t make people have babies, decide how much money to spend on public infrastructure, make foreign policy decisions, tell national banks how to lend, etc.
> 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.
“Mistake” implies that it’s not done on purpose.
Corporations in the US don’t have any negative impact when laying people off. They have minimal to zero financial obligations to employees and essentially zero meaningful regulations on the matter.
From the employee perspective the admission of a “mistake” in this regard is not “courage,” it’s an admission of cold-heartedness.
To the company, you are nothing but a purchase order, and your livelihood is meaningless.
Maybe someone would say “of course, it’s a business, that’s logical.” Maybe you would even say “easy to fire, therefore, easy to hire, more innovation.”
I say, we don’t have to run society that way, and it’s not a pleasant way to live. It was a choice.
I say this as someone with personal experience getting laid off twice in a row within the last decade. One time the layoff was in the same month I was hired. That was not fun.
These aren’t “mistakes,” these are companies who treat people like disposable lab rats. My whole team was hired as an experiment and quickly let go when it didn’t work out. The company doesn’t just “make a mistake” and find out they suddenly can’t pay the people they hired that quickly. They knew they were playing us.
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.
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.
Ok so get rid of the investors then.
Just get Dodge v. Ford Motor Co reversed.
That's what the pollution is for.
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 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.
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This seems kind of weirdly confrontational? Elastic was founded by the guy who created elasticsearch. Why shouldn't he make a living selling services around the software he created? This is a terrific success story!
Feels like you're annoyed the company ever tried to make a buck off their labor at all. Give your product away for free and this is what you get.
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Please write nicer comments.
Everyone has their own problems and their own feelings. Their socioeconomic conditions do not invalidate them.
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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.
I’ve seen many products die sudden, violent deaths due to unmanaged technical debt. If you have customers who care about quality and reliability, you simply cannot set up a false dichotomy between selling product and managing technical debt.
That said, I would also concede that over the past decade or two the clean code movement has made a damn strong effort of poisoning the term by trying to characterize technically inconsequential aesthetic concerns as technical debt.
Of course. But as an old sales guy used to tell me: "In the story, at the end the wolf shows up".
“Chasing tech debt” vs “more sales” is a false dichotomy. A dangerous one, too, if you simply expand “chasing tech debt” to “listening to engineering concerns”. That’s how you end up with a Boeing.
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.
There is a movie which does this, trying to align to WHO ICD list:
The Corporation / 2003
https://en.wikipedia.org/wiki/The_Corporation_(2003_film)
Free to watch on YT, IIRC
The corporation actually gave them a job.
Look at what they make you give
They don’t make you do anything. It’s a free country.
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.
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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.
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’m always amazed that the US is as entrepreneurial as it is given the healthcare situation.
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I think you’re on the wrong website. You’re allowed to be conservative here. But, you can’t be conservative and an idiot.
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And the Republicans wrecked it by getting rid of the mandate and then not funding the subsidy.
yeah, and no public option
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https://en.wikipedia.org/wiki/Efforts_to_repeal_the_Affordab...
> On November 2, 2017, a bill later known as the Tax Cuts and Jobs Act was introduced by Representative Kevin Brady of Texas. Included in the bill was the move to change the tax penalty for not having health insurance mandated by the Affordable Care Act to zero.[62][63] Economists said this would lower interest in obtaining health insurance coverage.[64] The bill was signed into law on December 22, 2017 by Donald Trump,[65] with the loss of individual mandate taxation being set to take effect January 1, 2019.[62]
Well, the government cannot compel you to buy a product for your own protection. What’s next? Forcing you to use protection during intimate activities?
> Well, the government cannot compel you to buy a product for your own protection.
They can, hence the mandates for healthcare.
> What’s next? Forcing you to use protection during intimate activities?
If you start creating negative externalities for everyone else, then yea.
If you are arguing from a libertarian perspective of you can do whatever you want, then I would demand you get a tattoo saying “do not give me medical aid” prominently on your forehead so my taxes aren’t wasted on someone who doesn’t want to contribute to society but expects aid from society.
If you are are cool with that deal I am actually ok with you, but don’t be surprised if we drop your body into a Zoroastrian Tower of Silence the moment you go unconscious from a car accident and can’t pay for medical expenses.
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Obama was a corporate stooge and neoliberal fuckhead who had majority in the senate and the house and spent his time fighting to pass a republican health care bill and wage illegal wars. I am a democrat but never ever will fall for that trick again. A fool can’t get fooled again.
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.
> 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.
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.
How do you want to measure standards of living here?
I'd like to understand why you are so sure, and what does worse mean here both qualitatively and quantitatively?
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 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.
Are you aware that you are saying US devs are making bank in a thread about US devs being laid off >
They are laid off (with severance) not permanently disabled. They most likely will find other jobs (linkedin is already full of recruiting messages). I don't intend to make light of it - getting fired sucks, a lot. It's a terrible experience. But it should be also kept in perspective - software engineers, especially in the US, are very well paid, even in comparison with most other US employees. Compared to, say, Belgium, probably 2x and more. You can say living in a welfare state makes up to it, that's a matter of opinion and preference, but if you look just at the numbers, even with layoffs taken into account, I think US software engineers are quite well paid.
Not sure why this is a thing.
As an extreme example, if Elon got fired from Tesla, I am sure he would be ok. He manages his money well and I am sure he does not think his job at Tesla is some king of God-given lifetime human right. If you are making $250k, a company is not expecting to be your baby sitter. You are a grown man or woman.
An employee needs to manage their economic life without depending on some company to make financial decisions for them. Getting laid off is simply part of life.
If you don’t want to be laid off, you can always start your own company and hire all these people, with your own money of course.
I think you meant to respond to a different post…
Are you aware for well over a decade US software engineers have been compensated many multiples compared to their counterparties outside of the US? 7% is around 280 employees.
Just because companies are holding layoffs does not mean software engineers are not still making bank.
>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.
No, that's not true. Most companies offer at least HDHP plans either fully covered or at minimal cost. HDHP plans, by nature, have high deductibles and out-of-pocket maximums, but usually well under $10k per year. So for a typical case, unless there's some catastrophic expense not covered by any insurance, the difference can't be more than $10k per year. The difference between typical compensation for a seasoned SW engineer is much more than that, even before taking options & stock into account. In the US $150-200k is pretty common for a seasoned engineer. In Belgium, you'd look at around E100-110k from what I could find online. And I don't think Belgium has lower tax burden overall. So the health insurance alone doesn't come close to covering the gap.
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.
Presumably you aren’t paying 52 weeks of severance to someone you hired three months ago.
That’s right but depending on country there may be other legal requirements necessary so the costs tend to add up quickly and on average when you peak behind the curtains at an EU company you see it’s often easier to retain low performing members than it is to go through legal expenses and the notice period. You tend to be more thoughtful if you want to add HC on that region and avoid restructuring the company.
Maybe it works out on average but there are distinct pros and cons. On the net you get less job creation, less innovation and on the flip employees have more protection from being fired.
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).
You can always move to France or Germany.
Also you can always move to the UK. I hear they give you free housing and a stipend especially if you come from certain religions or regions.
Eisenhower: "If you want total security, go to prison. There you're fed, clothed, given medical care and so on. The only thing lacking is freedom.”
I don't think there exists a company (at least in the US, in Asia they do have "lifetime employment" system even though that gets eroded too) that can promise it will never have a layoff. Did you know any such company that when it hires you it would tell you "we're here for the long term so you will never laid off, no matter what"?
I too was young and idealistic at one point.
You should start that company and guarantee that you will never lay anyone off.
Will you do it? Why not? Please don't make excuses. If it's easy, you should be able to!
It’s not like countries that decided against kleptocracy are drowning in unemployment. On the contrary, they often enjoy a happier population, a better standard of living, or both.
Well, millions of people risk their lives to come to the USA. There is a reason for that. While many come to be takers and abuse the system, many come because of the freedom to take care of your own destiny without expecting someone else to take care of their lives.
> 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.
because US government is more controlled by business interests than population voting power.
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.
>since they gave no notice
WHy wouldn't they do that? What type of notice ado you mean in this case?
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.
booking.com is in NL, and Spotify in SE. Both outcompeted quite some US competitors.
I would add Hetzner as an example that EU labor laws are no obstacle to being competitive with US companies.
>booking.com is in NL, and Spotify in SE. Both outcompeted quite some US competitors.
Like wich? Does it count that a lot of their shareholders and managers are in the US? Does it count that Apple music can do the same thing as Spotify and that Booking has loads of competitors that do the same thing? They have no technical moat other than being first to the market. ASML does have a moat.
>I would add Hetzner as an example that EU labor laws are no obstacle to being competitive with US companies.
Sure, but Hetzner is a dust spec compared to AWS, virtually irrelevant outside of EU/Germany. They also came to the market much later than AWS once building a hyperscaler became more of a commodity.
One one hand, lax labor laws means you can be first to market and capture most of it before the EU can wake up from their 3 month holiday and decide to pivot but can't because unions are blocking it. See VW.
On the other, Austria has very lax labor laws around firing people, similar to US and they have next to no big tech companies so that's not the entire formula. You also need the VC capital of Sequoia and AZ16 which doesn't exist in Austria, you need the scale which doesn't exist in Austria, the low tax caproate environment which doesn't exist in Austria, and a small government regulatory environment which doesn't exist in Austria.
ASML licenses their IPs from the american government. But yeah, they are in europe and work with european suppliers.
Or SAP, or ARM.
I honestly don't know how sap is still in business. ARM is a good one.
The Nordic countries provide income replacement and retraining instead. Labor market inflexibility locks out younger unproven workers.
Limit mass firings and you are also limiting mass hirings.
HN is very much pro regulations of all types.
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.
Also so many people with so many guns.
Mass Unemployment with no healthcare or supporting social services , very few opportunities and lots of guns.
It will not be ok.
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.
Are you seriously suggesting that the reason it is cheaper to shift factory labor from the United States to Mexico or Vietnam is because Mexican/Vietnamese factories don't need to hire diversity consultants? I have to have misunderstood what you're arguing, because that's transparently ridiculous.
Basic labor regulation around hiring/firing has nothing to do with diversity. It has everything to do with basic labor regulation around hiring/firing. Sure, regulation is expensive. There's no special reason the United States can't foot that bill and every other Western European economy can.
What on earth do diversity consultants have to do with prohibiting opportunistic layoffs to maximize short-term profits?
>Are you seriously suggesting that the reason it is cheaper to shift factory labor from the United States to Mexico or Vietnam is because Mexican/Vietnamese factories don't need to hire diversity consultants?
I was talking about white collar labor, not factory work, but yes, that also applies there as well.
>Basic labor regulation around hiring/firing has nothing to do with diversity.
It does when some poor performers you want to fire are part of a minority protected group and can sue you even if you're not firing them because they're minorities but because they're bad at their job, it's gonna cost you extra to avoid fake discriminatory lawsuits. Then hiring abroad becomes a better idea.
>every other Western European economy can.
Because in places like central europe you don't need them so you save money on payroll, as there's no bitching over "diversity", every worker is the same so there's no chance of "i've been discriminated because of my skin color, I'm gonna sue you for millions"
When you are making $250k or above you should not think the job someone gave you is some kind of God-given right.
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.
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.
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.
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.
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.
You’re missing the point. You’re still holding on to the notion that somehow getting rid of people was fine because the company could run well without them (that’s debatable but it’s a tangent). The same logic is being applied now with AI. Doesn’t matter there was no AI back then or how good/bad AI is. People are being laid off and the companies are doing fine. You can’t cheer one and then complain about the other.
> You’re still holding on to the notion that somehow getting rid of people was fine because the company could run well without them
Yes? It's not an adult daycare. It's a commercial company. The premise is you are employed because you contribute to the functioning and the profitability of the company. If it's not the case, well, it sucks but you can't expect to be paid just for warming your seat. I mean, I wouldn't object somebody giving me six figures just for existing, but I hardly can expect and feel entitled for that to happen?
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)
It’s not that surprising there wasn’t much empathy when there was so much bragging about how much people were earning and that it would go on forever.
For what it’s worth I was one of the people questioning why they needed so many people although I never said those let go deserved it.
> I was one of the people questioning why they needed so many people
Unfortunately that’s what managers, executives and investors are doing everywhere now. Everyone Should’ve been more careful with the reactions when the status quo was upended.
"We all know people are overpaid for doing nothing, but if we don't talk about it somehow it would continue forever"? Doesn't sound like a smart strategy to be honest. The truth will come out.
It seems like you are itching to offer your version of what should happen, so let's hear it.
"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.
The interesting thing is how different outwardly similar businesses can be. I remember doing back to back contracts for two similar sized pharmaceutical companies. One of them had an IT group ten times the size of the other. You can guess which project overran.
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.
Here's my translation of this announcement: https://layofftranslator.com/layoffs/2026-06-24-elastic/
dude, this is the work of a genius
Ex-Elastic here. At Xata, we've built a company with many of the things we loved about Elastic's culture, and several former Elasticians are already on the team. We're currently hiring Backend Engineers, a Product Marketing Lead, and a Head of Product. If you're interested (or know someone who might be), send us a message!
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...
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.
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.
7%? Small? 10 years ago, 5% was significant, and that was in a fairly mature sector.
Granted, in that context, you'd be laying off 5% every two-ish years until industry trends changed direction.
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.
The anticipation is worse than the event itself.
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.
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.
Am I misunderstanding their current finances? On yahoo finance, I don't see net negative income for ESTC.
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.
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> 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...
Sad but you unfortunately need to make a profit as a public company at some point. In 8 years since going public, they've had essentially one marginally profitable year surrounded by lots of losses while growing to 4000 employees. Easy to blame AI when the fault is really poor leadership.
So how many people? I can't find this info anywhere.
There were around 4000 employees before this announcement, so around 280 people affected.
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.
> Customer expectations are increasing and evolving faster than ever before
Wouldn't that suggest you need those workers more?
> 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
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.
lol everyone quit using elasticsearch for opensearch. Elastic use to be pretty cool but that was over ten years ago.
> this requires us to move faster and operate leaner than we have before
:laughing:
> To do it, we're shifting our pace of innovation, simplifying how we operate, and investing in new skills. That's what this reorganization is for: a simpler structure, with fewer layers, less complexity, and less friction.
Translation: We're going to run the remaining people ragged.
> That means fewer layers, broader ownership, clearer accountability, and a sharper focus on the skills we believe matter most for what's ahead.
Yeah the people remaining are cooked.
It's never "we're going to hire more people to build lots of cool stuff" it's always giving fewer people quadruple the responsibility expectation.
They should layoff everybody, close down the company, and just use postrgres full text search
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.
Seven percent sounds about right what AI can replace
The business has been losing money for years. Perhaps 7% is better than 100%.
Bloated POS software. Kill it off.
Right now if you're a open company, you have to keep a constant flow of layoffs in order to satisfy the wall street vampires.
I don't even blame the CEOs anymore, very few of them have the fortitude or the luxury of even being able to say: "Shut up stupid monkeys, I won't do layoffs to satisfy your urges this quarter, I don't want to fuck the long term value creation ability of this company just because you want a quick orgasm now".
Founders + dual class shares. Founder-CEO is much more likely to say that to investors, especially when the class A share give him 10x voting rights.
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.
this should we do this or no this is not right
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