Why do people gossip?
Because it does real social work — and the research finding that surprises people is that most gossip is neutral and a substantial part is positive, not malicious, despite the word's connotations.
What it actually does:
Information sharing about people, which is how anyone learns who is reliable, who is difficult, what the unwritten rules are, and what happened while they were away. In a workplace, most of what you know about how things really work arrived this way.
Reputation enforcement. The knowledge that behaviour will be discussed deters bad behaviour. Evolutionary accounts treat gossip as a low-cost mechanism for policing cooperation in groups too large for everyone to observe everyone — and experimental work finds that people behave more cooperatively when they know they may be talked about.
Bonding. Sharing information signals trust, and the act of confiding is itself a relationship move. This is why gossip clusters in close relationships rather than among strangers.
Norm learning, especially for newcomers, who learn what is unacceptable by hearing about someone who did it.
Warning, which is the clearest social good — telling someone that a person has a history is protective, and discouraging all gossip disproportionately protects those who behave badly.
Status and entertainment, which is the part with a poor reputation and is genuinely present.
What the research finds about content. Studies recording everyday conversation consistently find that a large share is neutral information exchange, positive gossip is common, and negative gossip is a minority — smaller than people assume, though it is what the word evokes.
Where it becomes harmful: when it is inaccurate and unverifiable; when it targets someone who cannot respond; when it substitutes for saying something directly to the person; when it is used to exclude; and when it circulates information given in confidence.
The useful test before repeating something: is it true, is it mine to share, would I say it to them, and what is it for?
A caution: "don't gossip" is sometimes deployed by those who benefit from information not circulating.