Elastic (ESTC) plans to lay off 7% of its workforce amid the rising adoption of artificial intelligence in the workplace, while Chief Product Officer Ken Exner will step down on July 17, the company said late Wednesday in a filing.

The company expects to incur non-recurring cash charges of around $22 million to $25 million related to the plan, mainly in Q1 of fiscal 2027, and to substantially complete the workforce reduction by Q3, it said.

Elastic said it will continue hiring for customer-facing roles, and projects the total headcount will grow this fiscal year from a year earlier.