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CEO Ash Kulkarni's email to Elastic employees
Today, I have the sad responsibility to announce we are reducing our team by about 13%.
I didn't take this decision lightly. Since becoming CEO, I have had the opportunity to spend time with Elasticians around the globe. It's been an honor getting to know so many of you. Your passion and commitment humble me.
I have also had the privilege of meeting with hundreds of our customers. We are fortunate that security, observability, and search are mission-critical to our customers. However, it has become clear that the global macroeconomic environment is forcing our customers to tighten budgets and review investments more closely. This is especially true in certain segments of the market like small and medium businesses where the current appetite to spend in uncertain times is limited.
In order to help our customers through this clearly difficult environment, it is more important than ever before for us to stay close to them and to help them realize the value of consolidating onto a single platform for multiple business-critical use cases. That also requires us to be more focused on our coverage, our sales plays, our product investments and our internal support as we drive greater operational excellence.
In short, this means increasing our focus on those areas of the business that are most critical to our future, and finding more efficient ways to service some parts of our business. This will enable us to navigate through this business climate and emerge even stronger in the future.
I know that this decision is the right decision for our organization. But that doesn't make it any less painful and humbling. I promise you that we will treat our departing Elasticians with empathy as we have always treated each other. I also promise you that we will come out of this stronger and better prepared to grow our market share.
Here's how we are caring for departing Elasticians:
Severance: We will pay a minimum 14 weeks of compensation to all departing employees, plus one additional week per completed full year of service.
PTO: We'll pay for all unused PTO time.
Healthcare: For Elasticians participating in our healthcare plans, we will pay 6 months of existing healthcare premiums or the cash equivalent depending on location.
RSU Vesting: Departing Elasticians will receive their December 8 vest.
Career Support: We will be setting up resume and job search support for our impacted employees.
Immigration Support: We will provide immigration support for those who need it.
The vast majority of impacted Elasticians have been notified. We operate in 45 countries, so in some cases the timing of notifications may vary based on local laws and practices. An Elastic manager will reach out in the next 24 hours to set up meetings with those who are affected.
In addition to reducing headcount, we are also reducing cost in other areas. For instance, we are optimizing our global real estate footprint.
I am confident we have the right strategy. We will continue to focus on developing the best cloud experiences for our customers and driving profitable growth.
Today is a sad day. We are saying goodbye to friends and colleagues.
As hard as this is for all of us, our future is bright. I look forward to working with you to propel Elastic into that future as we make Elastic a generational brand.
Ash