This (from the September 2025 post) now evokes the Curb theme:
> Like you, we have seen numerous reports that more and more firms are capping their total headcount in favor of leaning on more AI tools, leading to downsizing their intern and new-graduate hiring. This is resulting in increased sidelining of new college graduates. But we think this misreads the moment completely, so we’re heading in the opposite direction.
> While we are excited about what AI tools can help do, we have a different philosophy about their role. AI tools make great team members even better, and allow firms to set more ambitious goals. They are not replacements for new hires — but ways to multiply how new hires can contribute to a team.
This is the predominant (public) talking point. And it’s true.
But along with that: when you have effective people becoming even more effective with AI, it becomes glaringly obvious who the INeffective people are. At which point it becomes hard to justify keeping those people around.
(That often includes people who are otherwise effective but aren’t utilizing agents and are therefore losing their edge.)
I’ve seen managers hiring people with an intent to lay them off when winds change to protect themselves and their close circle. I can only imagine they’ve had great KPIs in both cases: first for scaling the team, and then for cutting costs.
This is completely acceptable. When was the last time you saw any job seeker seriously enquire about such practices in interviews or at the application stage?
A lot of people here and in the industry in general seem to optimise for compensation package and put blinkers on themselves for other factors that are definitely relevant.
Companies aren't penalised by candidates for such practices. I'm not saying it's good but it's astounding to me the number of people who for example optimise entirely for salary and then are shocked when the working conditions are very poor.
People game companies and companies will game people in return. Murray Gell Man amnesia will kick in and next week there will be thread about how CloudFlare is a great place to work for software devs because you can earn 20% more than other comparable companies with no reference to how things like job security or working conditions are measured.
Either they will answer directly with something solid like "We're growing the team" or they will evade it which is still a meaningful answer for you. You could probe further with questions like:
"How has the team's headcount changed over the last 18-24 months?"
Basically you're alluding to 'employee turnover' without saying it.
Back in the late 90s a senior Microsoft exec explained this to me, they had acquired staff and continued to operate entire divisions which he described as "ballast". In the future, once the stock price increases slowed, they would be heaved over the edge of the balloon basket so that it could continue to rise. I often think about that.
It's the natural result of "fire the bottom 10% every year".
If that's the rule in your organization, and you have a core group of people that actually know the systems and get the work done, you better make sure you have 10% padding every year, lest you layoff someone important and their friends all quit in disgust. And since competence and institutional knowledge is built over time, that implies a revolving door of new folks coming in and most of it not making it.
It feels like it was the most beneficial implementing better decision making mechanics by replacing manager with AI, not lowly folks doing actual value creation.
LLM models have better reasoning abilities than these folks....
They are not as good at building an old boys/girls network though who help each other into positions of power and wealth. Companies within companies...
> You lay off 1100 who are late in their career for younger people who will work more hours for less.
Yet management always seems to miss the institutional knowledge, and experience, that also walks out the door laying off those 1,100 people 'late in their career'...
It's not possible to cram 25 years of experience into two.
> Yet management always seems to miss the institutional knowledge, and experience,
If they actually miss it they can call it back to work for triple the going rate.
They usually don't though. Those left behind have to figure it out again with whatever new tools they have at their disposal, thus continuing the great circle of corporate life.
Or corporate death if they don't figure it out in time and it is actually important. But even then, the management won't miss anything.
Most of the time, management don't even know what they don't know. As a result, entire America lost engineers and builders and now don't even know how to build rails, factories and rockets to moon.
I'd imagine it's access to capital and resources. I suspect many engineers/professionals (especially in eg consulting or manufacturing) would start their own business if they have the financial stability to do so.
A lot of market forces tend to "naturally" create monopolies/oligopolies. For eg if you're the biggest steel plant you can operate efficiently and keep moderate margins, beating any plants not as big (economies of scale). An independent guy (or even the entire team) can't just open a new steel plant shop down the road, even if the current one sucks.
Haven't software engineering salaries been like 200K for almost a decade? With very little actual need in capital requirements relative to a host of industries with expensive equipment, I'd say of the class of workers most poised to start their own businesses, I'd say you guys are the best placed.
To be a bit honest, I'm a computational scientist who's never seen anything near 100K and likely never will. It's hard to imagine not having around 4 times my salary and not being able to start something myself.
> I'd say of the class of workers most poised to start their own businesses, I'd say you guys are the best placed.
I think your premise is significantly correct; things like launch HN (and even YC startups) are heavily software biased. I suspect you'll find about a hundred product hunt products for every physical kickstarter/indiegogo.
It gets sucked up into housing. So if you're in your early 50s that's fine as you probably brought very cheap. Mid-40s and under? Unlikely unless you were extremely lucky. I'm 45 by the time I've been able to buy housing it has always been peak despite having very high earnings at times.
That's basically the meme, right: You rail against corporations and yet you work for one. Curious.
Anyway in general, corporations are sticky. They save resources through scale and collaboration. Famously this is a problem for free market true believers because if you believe that the market is the most efficient mean of organizing people then you would expect firms to operate internally as free markets (or disappear). There is a whole body of work about it,
Engineering and running a company are very different skill sets. Engineers are often not good at Marketing, networking, sales, ...
Even if you are good at those, for many companies, it's more about connections than about the ability to build stuff. So if you don't know the right people, it is very difficult to get a foothold.
Marketing, networking, and sales are the job. Or a large part of it. If you don't have connections, knowing how to make connections is part of it.
Accept that there are other skills besides engineering, and they can be just as challenging to learn, and just as opaque from the outside of you don't understand it.
I have AuDHD - there is no way I'm running my own company. I'm a good developer but I need someone else to have the idea and run the business and I can lead a small team to bring it about.
Given I'm now in my mid-50s, things are looking grim. And I'm not getting paid SV silly money. I'm not even getting paid US dollers.
Or phrase it as reusing exiting tech because "it is cheaper" ending in having to reinvent it because all the people who designed it and made it have gone.
That happened in the reverse way. The government fired and underpaid a lot of people at Nasa ... and Musk hired incredibly experienced people, who became experienced on the taxpayers' dime, to build a rocket, for huge payrises.
The biggest but not only example: https://en.wikipedia.org/wiki/Tom_Mueller (yes, lots of subcontractors involved, however, Nasa paid, with a bonus percentage provided by the US military)
Note that Mueller gives the payment situation at TRW, and the fact that he "wasn't appreciated" as a direct reason to go to SpaceX.
What did you think happened? Does anyone actually believe Musk did the technical design for that engine, just because he claims so? Or I should say he constantly claims it, staying slightly away from direct claims to avoid getting caught in lies (well ... getting caught AGAIN).
SpaceX has nothing to do with any part of the Artemis II crewed lunar fly-by. They were considered and rejected. It was entirely legacy aerospace contractors. SpaceX is under contract for parts of future missions including the lunar lander.
>If they actually miss it they can call it back to work for triple the going rate.
That’s great in theory, it rarely works in reality. Those people almost universally find new work quickly because they’re good, or retire because they can.
In both instances the idea of going back to bail out a company that just screwed you, operating with a giant target on your back when the inevitable next layoff occurs, isn’t worth it for 10x the salary. Ignoring the fact a business of any significant size isn’t approving paying someone to come back for 3x, they’ll just caN the manager for the fallout.
Lately it feels like it's possible. Freshers in their first job are now capable of taking ownership and shipping full stack features in a few weeks. The feedback loop is definitely shortened - noone appreciates the years spent "googling and looking at stackoverflow" anymore, and frankly, they shouldn't be.
Experience matters now mostly at the architecture, and decision-making levels, not at implementation.
I was reviewing some code done by a junior hire at my company last week, and it certainly didn't look like he was cramming 25 years into 2. It looked like he had no understanding of anything he had generated, because it was garbage. Meanwhile this week I've just reviewed the largest single PR I've ever seen, from a senior dev who disclosed it was mostly generated and cleaned up by him, and the code was perfectly fine and it was a breeze to review.
LLMs are a great tool, but more often than not it does show if the person using them knows what they're doing or not pretty clearly. Especially if it's anything larger than a trivial small change.
Every time i see a comment chain like this i'm annoyed. In the last 3 decades we never truly found the words to define what kind of skills, problems, and people /-space exist in the industry, and AI has literally added a whole axis to the space so we're more unable to communicate than ever.
Having said that, and feeling more with you than the other guy, there is nothing for you to "disagree" with.
Mediocre was always buggy and broken in some ways, but for all intents and purposes it was good enough. Today somebody with a year of study can reasonably deploy something - for which the appearance of taking ownership and shipping a full stack of features has reached the bar of good enough.
Consider 10 years ago: Did you believe it was more likely that in the quality-distribution-of-software that we would, over time, create proportionally more quality? I dont think so and AI didn't meaningfully change the trend.
It changed the work dynamics, and still is changing, and with our inability to communicate is going to be an annoying mess.
Dont let the annoyances blind you to what LLMs can do for your point in space, or to where most of the points lie for the rest of the world.
I think we should care that our engineers have put the effort to understand the code they are responsible to produce. I don't care specifically about how they get that knowledge (I am using AI to learn myself, for example). But I disagree with the implicit assumption on the statement, which is, in my view, "humans don't need to understand the code any more" (because some fresh out of university might think they understand, but they really don't).
The problem with AI isn't that it's mediocre, I can work with mediocre. The problem with AI is that it produces absolutely stellar world-class code with two hidden 0days in it.
I can't work with that sort of surprise. I'm tuned to consistency, and I can work with consistently bad, but not with "95% absolutely amazing, 5% abysmal".
And I say this as someone who develops exclusively with LLMs now.
I am using Claude Code with Opus 4.5 and I have to correct it every day. It produces working code but it makes mistakes. The code is more verbose than it should be, misunderstands/ignores edge cases, etc. Daily.
And I am not a stellar world-class programmer. I am pretty average. I just read what it produces.
I'm not talking about some hypotethical scenario - but what I observe. When I started out, us interns were tasked with "nothing". Now the skill floor is so much higher, and I'm seeing freshers accomplish tasks that were previously thought of strong mid-level or early senior ones.
Laying off people with experience which only 1% of their younger colleagues will learn because LLMs made it redundant enough is misguided today. If I were a CEO I’d hold on to my 15-20 yoe engineers for my dear life; can lay them off in 2028.
I worked in a company that did that. They couldn't rehire the senior after the junior burned with a bug 700k in 20 min by touching a part of the codebase no one had context for anymore.
So you can’t be discriminated against if you’re less than 40, but that seems somewhat discriminatory (maybe you wanted to be), but that means that you are being discriminated against, but that’s meant to be forbidden.
You would need some class action lawsuit I’d think? Need a good number of laid off people to join it and you need solid statistics that would convince a jury more than the corporate lawyers would with whatever HR covered their assess on paper have.
Should companies be forced to retain talent of a certain age group? Should they be forced to retain less competent people? How do you expect this to work?
In Sweden,the Employment Protection Act, (LAS ) mandates 'last in - first out', meaning if there are layoffs due to over-capacity, people with seniority (years of employment) take priority for available positions. This is kind of partioned by profession-group, so yes you can fire nurses but keep doctors, or other way around. (Its been a while since I looked into it, but thats the rough gist of it)
Yes, and that makes working for a Swedish company so much better. You know you can’t just be shown the door at any moment after years of service and you get a lot of peace of mind which is worth more than the inflated salaries in the US. There is still a way to get rid of people, of course, but that goes a little like the Japanese do: just don’t give any important work to the person, or give them a bad performance review. People quickly understand they need to move on and they can do it with dignity.
That also means that a) it's harder for younger people to get a stable job b) the bare minimum of work not to get fired decreases over time, which is bad for productivity.
If a significant share of your employees optimise in the sense of doing the least of work possible, without getting fired, you have a huge problem anyways. Usually, given the right conditions, people have intrinsic interest in doing a good job. Even if their motivation is more of the extrinsic type, there is more to it than getting paid.
Yes, it only works in a high trust society where there’s plenty of jobs and people actually care about doing a good job (any company will have incentives, people can’t just sit around and do nothing, lots of social pressure too if you’re a slacker). But hey, that’s been mostly true (until recently, I hear immigrant unemployment is really high, while “local” unemployment is close to zero, but the official statistics sit in the middle at around 7% I think, much higher for the youth).
In my experience those people get juicy positions doing nothing useful as they their competence long atrophied due to zero pressure to keep their knowledge up to date. Of course now companies hire "consultants" to work around to issue, so those get fired on a week's notice when money is tight. The warm bodies remain in their chairs until retirement. Inefficiency remains a huge problem in Swedish economy, but no one dares to touch these archaic rules (BTW no minimal wage in a European country, WTF?) due to political reasons, so the immigrants get the blame instead for everything.
Its a choice - work hard with minimal securities, get better salary. Heck, one can do that in many EU places when working as self-employed on contract (if legal), and be paid by just billed days, no vacations or sick days. Its actually pretty good career path in the beginning of one's career in software development, get more money and ie invest in a property. Then get more secure permanent position, coast more and enjoy and appreciate more those stability benefits.
But high economic performance this isn't. Adaptability of market to ever-changing world that certainly isn't neither. Europe is getting hammered by this and things will get much, much worse in upcoming years. We will have to revisit our comfy lazy attitude towards work, or end up being a stagnant place with 3rd world salaries and corresponding QoL.
Switzerland is doing things much better, its sort of in between both extremes and economy is reflecting this very well. But EU leaders egos will sooner accept poverty than that somebody figured out things better than them.
The Netherlands recognized the problems with the last-in-first-out system and requires that after a reorganization, the statistical distribution remains the same. How well that works is hard to say because the level of unemployment in The Netherlands has been quite low for many yours.
What I hear is that Switzerland is a bad example. Many people there struggle to make a living.
The poverty line is derived from the guidelines of the Conference for Social Welfare (SKOS). In 2024, it was on average CHF 2388 per month for a single person and CHF 4159 for two adults with two children.
I live in Zurich (by far the most expensive city) and while 2388 (or 4159) would be tight (depending on housing) it would still afford you a fairly comfortable life with access to top quality healthcare and public transport. Life quality wise one could argue that poverty in CH is a better option than a middle income in a lot of European countries.
Outside of Zurich rentals are not even that bad. You can easily get a nice apartment for 1500.- or even less. If one is struggling financially, rents are lower e.g. in Aarau district, starting from around 1000 and you can commute from there. Spending 1000 when the median salary is around 7000 is really not that bad. Low inflation in Switzerland meant other European locations are now at the swiss level or sometimes even above.
Yeah Switzerland has rather few poor people and very strong middle class. And poor ain't some US version of homeless/trailer park living, just lower income, less fancy clothes, shopping in cheaper supermarkets, less/no vacations abroad.
Just for others, it seems this was already an article so it came up quickly, but for fines, not taxes.
"In 2024, the total income tax paid by all publicly listed European internet companies combined was approximately €3.2 billion. This total, which includes firms like SAP, Adyen, Spotify, and Zalando, was notably lower than the €3.8 billion in fines the EU collected from US tech giants in the same year"
China is hiring engineering talent. US is firing. Nobody forces anybody to do anything. Just pointing out the current state of affairs in the long life cycle of empire. As Ray Dalio says US is very late stage declining „financial capitalism”. While China is early stage aspiring „production capitalism”. It is not like late stage declining USSR needed as many engineers as it did when it wasnt collapsing. USA is a collapsing empire. China is growing.
>You're building the future with new fresh people instead of the "dead weight"
If the "future" being built is one that those same interns would be dropped as "dead weight" as soon as they settle into families and refuse to be exploited with overwork, then it's a bad future, even if it's one with more CDN features.
Although, instead, it will be a more enshittified one anyway: they're cheapening your company and the product and lose organizational and operational knowledge in the process.
But the truth would likely be closer to that those fired would be a mix of mostly extra people hired plus some older employees. But instead of "we hired extra X less than a year ago, we shed X now", it's rebranded as "we reduce our workforce thanks to AI" to get possitive press and appeal to the less bright small-time investors.
There's an interesting assumption here that all people working at Cloudflare are great developers, and none deserve to be fired for poor code or laziness.
Picture a space station where there's an error when trying to seal the door and they proceed anyway and it explodes from the pressure differential as all the air escapes out to space.
You're expecting the country that's all-in on anti-vaxxing, climate catastrophe denial, and the disassembly of democracy to understand what institutional knowledge is?
yes sure. its pure accounting and buying into the scam that genai+junior will reduce costs. meanwhile they tokenmaxing vibecoding uis for 50% of their wages cost. I will short every company making those moves.
i saw this ALL the time at past employers. Employers higher all kinds of interns who eagerly get truck loads of work done and build great connections. and 2 years later the company is getting sold off, out of business, or mass lay offs all over the place. what's the point of highering all those interns in the first place?? geez.
Need to propagate a lot of dollars fast, 24/7 as a moat on it remaining a reserve currency.
99% of these software startups are basic software that can be handled by a single dev; see Reddit apps and such.
But that money printer was running hot and heavy. Needed to funnel it somewhere. Why not that favorite political cudgel of the elites; pointless busy work jobs! Let's invest in a bunch of shops nearby for them to lunch at too!
Big tech, sure, but not all the startups. I can assure you having freelanced and mentored many a SWE at 5-20 person startups the last 6 years they are not all hiring pro chefs.
Have you not been reading the headlines about urban offices empty? Low taxes to create foot traffic for other businesses?
The trickle down of the ZIRP era was about spreading all the dollars they could print as quickly as possible to maintain dominance of the dollar.
SaaS apps are meaningless to future generations. We were never creating pyramids of Egypt like wonders. We were missionaries for contemporary American propaganda.
>mass lay offs all over the place. what's the point of highering all those interns in the first place?? geez.
If you don't hire them, someone else can hire them. Out of 1,000 you hire, one could be an "attention all you need" research paper writer, who could set up the next stage of innovation which you'll completely miss if you do not get anyone.
Initially, you’ve got to starve out the market of talent to stop competition from growing by nipping the threat in the bud.
> Out of 1,000 you hire, one could be an "attention all you need" research paper writer, who could set up the next stage of innovation which you'll completely miss if you do not get anyone.
I have worked with people of this caliber. The company did nothing to retain them, and the company did not retain them.
I am part of Management in my company. We explicitly maintain a list of key people in the company we don’t want to lose. The truth is that just a few people are what makes a company. Lose them and you are in trouble. Some companies don’t seem to understand that, but perhaps after a certain size, it doesn’t matter anymore! The machinery just keeps turning.
I met a guy this happened to. He got a special award within the company, asked for a bit of equity, didn't get it, in fact got blacklisted and booted out.
Well how can they have the time or resources to invest in retaining talent? They're busy hiring more interns, where one could be an "attention all you need" research paper writer, who could set up the next stage of innovation which you'll completely miss if you do not get anyone.
Yeah that's a the meme tech bros go with trying to look smurt
But it's pretty clear with the money printer switched off the real motivation was the propagation dollars fast and wide.
The rest of the world has rebuilt after Biden and Trump's and their parents generations bombed it to glass.
Those countries modernizing create an existential threat to the dollar as a reserve currency; fuck Americans! says a generation that grew up in a shit hole Americans left behind.
While polite publicly as expected a whole lot of the 8 billion outside the US do not give a shit the US exists and has power over them.
Wonder if they'll do it like they did for Brittany Pietsch. She recorded her firing video some years ago. I think it's on tiktok but there are youtube videos discussing it as well.
Anyway, new employee at Cloudflare, just finished onboarding. Suddenly a short meeting is scheduled with two people she had never met before. She is told she is let go for "performance" reasons. She kind of tears into them with "what performance issues, I only got great reviews" just to hear the HR people squirm and backpedal, well because, they know they are lying. But of course, they're trained enough to never admit it and say "they'll get back to her on that". Needless to say, it has the same effect as a suspect being arrested arguing with the cops. But it did make Cloudflare "famous" on tiktok for a bit.
I found that video and I couldn't finish watching it. TBH it's really incomprehensible to me why we've created a culture where being so heartless is praised upon.
HR doesn’t squirm because they are lying. They squirm because they minimize lawsuit surface area as much as possible. I have been on the giving end of performance layoffs in big corps and there is an extremely strict script you have to stick to (both HR rep and me as the manager).
I saw the video you’re referring to and it’s completely unsurprising they clam up further when she became confrontational. You’re not gonna talk your way out of a termination unless you have some pretty hard evidence it was for something illegal.
That’s just what getting fired looks like and people don’t often get to see the process so cloudflare “became famous”.
Most of the US is a right to work environment where a company can let someone go at any time for any reason other than the few protected class reasons. Many companies also have 90 day probationary period where they bypass internal company processes and let someone go, again other than for protected class reasons.
It's obviously hard when people's lives are upended, but no one complains when companies do a lot of hiring because the risk is lower.
It starts with some things that minimize the lawsuit area, but over time it transforms into a habit of lying. It's company policy, you know? Don't question, just execute.
> Cloudflare aims to hire as many as 1,111 interns over the course of 2026. […] That’s why this significantly increased class of interns will have a special focus: to ramp up the creative and widespread application of AI with a fresh approach.
vs.
> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
> The number of our intern goal, a nod to our 1.1.1.1 public DNS resolver, is intentional.
But like the sibling comment says, "over 1,100" does not reference any of their resolver IPs anyways. In all likelihood, they hired fewer than the maximum of 1,111 interns and they are probably chopping slightly more than that here (max vs min).
> The number of our intern goal, a nod to our 1.1.1.1 public DNS resolver, is intentional.
Hiring and firing based on things like this should be a huge red flag.
I’m surprised they didn’t lay off 1001.
I realize those were interns, so maybe the expectation is they’re temporary from the start, but picking these numbers for marketing instead of need is silly.
I think this sends a clear message. And the message is this: "Don't work here! You will be f*d! Soon!"
(it also sends clear message to the clients: you will have to suffer through the cheapest to run AI agent in case of troubles, because yes, we care the most about Wall Street guy's income, not anyone else's, we save money on everything else anytime, even when we don't have to)
I've been told that a recession is coming since 2009, when I started investing - there has never been one since then despite all the dire predictions - therefore, my investments are safe
As long as you didn’t sell, and in fact bought more on the way down, you did well. Of course, not everyone’s time horizon works the timing (you might need the money and so sell at a low point), but generally, being in the market pays off.
Honestly not a bad theory. There’s definitely a huge disparity between actual productivity gained by using agentic coding done somewhat properly… and a non-stop wave of vibe coded work causing outages and churn. Pre-Covid hiring coupled with the high enterprise pricing for AI plans, it would make sense.
If you listen to people on HN you could think AI is not increasing productivity or is even having a net negative effect.
I think the reality is different.
In this thread I saw the resume of an engineer affected by this Cloudflare layoff. In the resume he claimed that adopting opencode in his workflow, he shipped an integration in half the time it took peers without AI assistance for similar projects.
I’m sitting in an airport after spending a week with a client. They’ve killed off one of their enterprise saas subscriptions with an internal ai assisted effort and are looking to kill more. Granted, they are extremely competent but software isn’t their business. There may be something to the saaspocolypse.
I've seen non-tech people building internal tooling that engineering just never had time to get to. Small/lean companies are leveling up with AI, and they aren't carrying the salary overhead of the big companies. The big companies are going to have to get that much more productive in order to compete and/or they are going to have to cut staff.
It is May 2026, there is no difference between AI and non-AI bills.
Most (if not all) major enterprises in the US have gone through at least one round of org-wide subscription renewals (eg: Atlassian product packs, Microsoft product packs, etc) where 1) price increases were mandatory, 2) AI features could not be opted out of, and 3) AI feature usage was strongly encouraged from C-suite to client-facing biz staff to telephone agent support staff.
I repeat, we are passed the point where AI bills and non-AI bills can be differentiated. We are all paying for these features driven by tokens whether we like it or not, whether the cost-benefit analysis makes sense, and whether they are even being used.
And we are all passing the costs onto everyone lower on the totem pole, from insurance groups to bank groups to national grocery chains to consultant conglomerates to minimum wage front-line staff to below-minimum-wage gig workers.
And this is why there are layoffs, every price increase from the top down causes further price increases to cascade down.
> The packages for departing employees will include the equivalent of their full base pay through the end of 2026. Healthcare coverage is different across the globe, and if you’re in the United States, we’ll continue to provide support through the end of the year. We are also vesting equity for departing team members through August 15th, so they receive stock beyond their departure date. And, if departing team members haven’t hit their one-year cliffs, we are going to waive those and vest their pro-rated equity through August as well.
The announcement reads as pretty heartless to me, but this is a very, very nice departure package
They have a reputation to maintain, otherwise it will be difficult to recruit the best people in future. That being said, damn, that is a very generous package by any measure.
Damn. I got two weeks notice and then got shown the door with nothing. And now I get to compete with all these people who are going to be so much less stressed
I want to agree, however, it will take every bit of that time for some to find new placement. These AI cuts aren't just making it harder to keep a job, but harder to get a job as well.
For better or worse, it isn't a company's job to pay laid off employees until they find a new role.
The industry standard for severance is 1-2 weeks pay per year at the company, paying out roughly 7 months is a big deal (and yes, an acknowledgment of how rough they know the job hunt will be).
This isn’t my experience, but I think it depends highly on the segment. We have mainly senior C++ devs (database company), and it’s still a challenge to find great engineers.
I think the current job market isn’t “one size fits all”. Having said that, obviously if they’re getting laid off, they may very well be in the segment that’s less desirable.
I've got a couple of friends that left London to go back to Poland during covid. They first continued to work remotely, but ended up switching to Polish companies because the pay was better.
Yes I think salaries are still a bit lower, but the gap has closed a lot. And cost of living is lower in Poland plus there is some tax break for self employed contractors that means you only pay ~20% tax compared to ~40% in the UK.
With those two factors you could easily end up better off overall, especially if you have kids
The kids factor is even bigger if you move back close to relatives. The ability to drop your children at grandma's instead of paying for childcare is an easy 1k a month you're saving.
I switched from a Polish company to a German one (both remote), but my pay is more or less the same.
The difference is that in Poland to get that money I have to be a "top performer" with a lot of stress and not a lot of time, while in Germany I can be just a mid dev.
I just tried hiring someone and received over 200 resumes that looked mostly fake. Thinking about adding a final in person interview in an attempt cut down the garbage when I repost.
Use a good recruiter to do the dirty work for you, it’s not cheap but it’s worth the lack of hassle.
With that said, at my firm we switched to using an in-house non-technical HR recruiter using nothing but a LinkedIn Job listing and the results are exactly as you’re experiencing. Perhaps 1 in 100 is a real human with a real resume, the rest are AI being fed our job description to generate a resume.
Onsite final interviews and technical assessments are our stop-gap.
I’ve considered writing informally and putting subtle typos in my cover letters, for example, to signal humanity. Is this a good idea or do recruiters look down on it?
What do you think can be a solution to this? I guess the problem is only going to grow as more people use AI, I'm sure someone out there is also using agentic workflows (basically spamming every job opening). Is the solution to use AI to filter the results or do you think that will not work out if the target is to find the best candidate
"We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere."
As an English enthusiast, I'm getting very frustrated at how the language is consistently abused in executive communications to write words without saying anything.
The implication that is NOT said is that suddenly 20% of people were sitting around without any work to do because AI was making everyone so efficient and productive. This does not, however, seem to be the reality, based on conversations within the company. It appears we have yet another case of economic downturn disguised as increasing velocity.
I don't read this as employing 20% was twiddling their thumbs and sitting around.
If it means anything beyond economic issues, I read the implication as their LLM expenses have gone threw the roof and with the choice of cutting LLM use or cutting headcount, well we see what mattered more to them.
it's all marketing wank, but how can they "supercharge the value delivered to customers" through company restructuring? whether they hire 50k more people or fire everyone, the value delivered to the customer depends on the quality of the product and the price - irrelevant of cloudflare's margins.
"We’re basically using our own staff as guinea pigs. Our AI usage has spiked 600% lately, mostly because everyone from HR to marketing is leaning on bots to do their actual jobs. We’re forced to restructure the whole company around these agents just to keep up with the hype, hoping it actually helps us ship something useful and justifies the "better internet" PR we keep pushing."
Of course it's a lie. Cloudflare is saying, essentially: "AI is making us so profitable that we've decided to reduce our profit by 20%, to keep it reasonable."
But they’re not profitable? They make 450k per employee revenue, but lose 17k profit. Meanwhile they spend 470 million in stock based compensation for example, up 100 mil from year before, on 5k employees, which they’ve been increasing a lot every year.
I am confused by this post. No trolling: You wrote "reduce". Did you mean to say/write "increase"? If you layoff people to reduce costs, then your profitability should increase.
You also have to consider nowadays whether a human even wrote most of it, or if is just a tale told by an idiot, full of sound and fury, signifying nothing.
But yes I agree the trigger for layoffs is never massive productivity, the reasons give here are completely bogus and if management actually believe any of it the company deserves to die.
Which part of that sentence was confusing? I found it perfectly clear. Their internal AI use is exploding, which is a signal that they need to structure for that, and so they’re laying people off as one of the first steps towards actioning that signal.
Nowhere did they indicate there is less work to do, in fact quite the opposite.
The sentence is not confusing, the sentence doesn't mean anything. There's nothing confusing about it, but there's no information either. "We're making great strides in AI" and "We need to cut 20% of people" are simply two statements without any connection aside from the fact that they are next to each other in the sentence.
> "We're making great strides in AI" and "We need to cut 20% of people" are simply two statements without any connection aside from the fact that they are next to each other in the sentence.
Huh? How is it not connected? More productivity means fewer people are required. I'm not sure how you are not able to connect these obviously connected statements.
> Their internal AI use is exploding, which is a signal that they need to structure for that, and so they’re laying people off as one of the first steps towards actioning that signal.
I don't see anywhere where the jump from "structuring for AI" directly leads to "laying people off", unless "structuring for AI" means there is less work for people to do, do you?
Noone knows what the correct structure for this new world looks like. We’ll see what they end up hiring for. But it’s fairly standard to lay off a bunch of people and hire new, rather than retrain, when you need to restructure
Not really. This is all so new, noone is using it correctly, because noone knows how to yet. We’re all just kind of flailing our arms around with it, but it’s clearly a force multiplier and its increased use is an actionable signal
I will reply here assuming that you posted with good intent. I think that their PR statement is reasonable from an investor perspective. Try to detach yourself from the personal effects of layoffs. In short, they are saying: Thanks to AI, we don't need as many people to run our business. It is pretty clear to me. Sure, you can be angry about the layoffs, but the economics are clear: AI is increasing profitability faster than the business is growing, so they are using layoffs to reduce costs. Imagine that you have an HR team of five people. If AI has dramatically improved worker efficiency, can you have an equally effective HR team with only four people? That is basically what happened here.
I think GPs point is that this is how they're trying to spin it, but they're not explicitly saying it, and there are doubts whether it's actually true. For outside observers it's difficult to simply ignore all the embarrassing outages that cf has experienced recently and just accept that the company has suddenly solved all their issues by using AI and firing people.
> For outside observers it's difficult to simply ignore all the embarrassing outages that cf has experienced recently
I don't know what to think when I see comments like this. Everyone makes mistakes. And no one provides flawless service. If their recent issues are so damaging in your opinion, why is their business continuing to expand at more than 20% per year?
I don't think the mistakes in themselves are damaging. What seems damaging to me is that cf has, on multiple occasions, repeated the same or similar mistakes right after they made major mistakes. This makes it seem like they're not learning from mistakes. Regarding the success of their business model, I can't make a meaningful statement about it, but is that really a convincing argument? If a business is successful, does that automatically mean their product is good?
> AI is increasing profitability faster than the business is growing
I don't understand how this could be the case for Cloudflare specifically. They made their name with DDoS protection and sandboxed hosting. These are exactly the products whose demand rises in lockstep with agent adoption. How could they possibly be allowing all the growth opportunity to slip past them? In times like this, with rising productivity to boot, you increase headcount, not decrease.
I hope this bubble bursts soon. HR people avoiding to do their actual job seems like it is the modus operandi in the majority of businesses these days.
Welp, looks like I’m affected. If anyone is looking to hire a systems engineer with distributed systems and load balancing experience, shoot me an email at <anything>@piperswe.me :/
Firstly, kind sir, layoffs are hard for each and everyone of us and I wish you best as you navigate it. I know you will get many wishes and good lucks though but consider my wishes to be one of many to help ya out.
I recommend if you can share your CV/send a message there, I will try to also keep an eye on it if you do share your CV/resume there and I would love to upvote your comment there to shower some more exposure/love from the community as you are member of hackernews. You are also part of the hackernews community and its the least that I/we can do.
This happened to me once about a handful of years ago, and it happened because in spite of actually getting the job on technical merit, they were a funded NGO who's benefactors demanded at least an undergrad to work in the company. True story, it happens.
Seems like a somewhat traditional suggestion with a potentially massive financial and time commitment. Not that it's not something to do, but why do you think that's the move right now, especially since they're clearly established in their career and nobody cares about it after a few years?
Not the GP, but I think the reason is, that right now it's super hard to get a new job, because of so many things, but mostly, because of AI craze and tanking economies. Bridging that time with a degree is not the worst idea, if you can afford it.
You probably have other stuff on your mind right now, thus I can understand if you are not in the mood for answering, but I‘m too curious to not ask:
According to the Reuters article, AI use has increased 6x over only three months. How did that feel from the inside? I’m especially curious because Cloudflare is not a toy company, and this is not about some influencer trying to sell me their latest „this changes everything“ bullshit.
So, shifting a company significantly towards agentic AI, and I assume this isn’t simply about „install Claude Code on every desk“: would you say it actually works? Or would you say it’s still more of a bet, and still needs to prove itself as a sustainable long-term strategy?
I work at a similar scale company. Like an average person's experience, some things are amazing and super productive with AI and some things aren't. And it's not always the same things all the time.
Sometimes we are able to do a ground up rewrite of a service and squeeze huge efficiency gains out of it all bc AI is helpful in doing so and we have a very good test harness.
Sometimes it makes subtly wrong suggestions that people follow and cause outages.
Sometimes it leads to huge headaches for devs who have to review huge backlogs of code with no idea which parts are serious and which are low effort AI slop.
Sometimes it lets you do a 2 month project in 2 weeks.
I'm going to start calling these "Canary" moments.
Assuming we take everything at face value for these sorts of cuts, it creates the following scenario:
A company finds itself with surplus labor capacity due to the efficiencies in AI while also posting substantial profit or revenue growth. The company could downsize the workforce to capitalize on short-term efficiencies and increase margins, though this will come at the cost of long-term reputational harm due to posted profits/health as well as burning out staff who must do the same (or increasingly, more) work with less headcount, leading to attrition when the market shifts in their favor. Alternatively, it could leverage this surplus labor for a period of moonshot R&D or paying down technical/process debts while they have the capacity and the profit to pay for it, which harms short-term share price relative to their competitors slashing jobs, while improving the company's capabilities in the marketplace in the long-run, potentially through mastery of these AI tools or the creation of new product lines.
The fact so many orgs opt for immediate greed over long-term growth really is its own canary that leadership and governance both has failed the marshmallow test.
"A company finds itself with surplus labor capacity due to the efficiencies in AI"
That is one possible interpretation, though I don't think it's supported by any facts.
A competing explanation: companies are spending a ton of money on AI in search of efficiency, and then laying people off in order to offset these investments. That's certainly what's been happening at Microsoft, Oracle, Meta, etc.
You can't really compare them to Microsoft, Oracle, or Meta. Those companies aren't cutting costs because AI replaced their own employees. They're pouring money into AI infrastructure and models because they want to sell that capacity to others.
Their thinking is more: instead of funding another internal product team, they can redirect that payroll spend into more AI compute and models they hope to monetize.
I don't believe CloudFlare is doing that, though they might, they could be needing to spend in Edge AI compute and what not, building out that infra isn't free, so they might need to find places the cash will come from.
AI is a fraction of cost of an employee though right? I have an 1000$/mo AI budget which is a fraction of my salary, and most people don’t hit their limits.
Sounds like your company is burning 1000 dollars a month for something people are barely using. At some point those costs become unbearable and they admit that absurd AI budget was a mistake, or they admit no mistake and fire people. I know which they'll choose.
Curious to know why are they not hitting their limits.
In the organization I work, things are crazy at the moment, we are drinking tokens as if we are in hot desert and 1k is barely enough for a week for some people
> A company finds itself with surplus labor capacity due to the efficiencies in AI
It's likely more:
A company finds itself with surplus labor capacity due to the over hiring during Covid, cutting down on risky ventures, protecting margins, and narrowing scope.
But I think there's also:
A company wants to see if AI is making them more efficient, decides to cut people as if it was and see what happens.
I also am not sure about the short term stock price, many recent mass layoffs the stock often moved down. The CloudFlare stock is tanking in after market for example.
Yeah, I wrote this before I dove into their balance sheets for another comment. Cloudflare’s cuts are more defensible than most, but the timing and explanation are shady given that they’ve had the same problems for years.
Excess labor would only translate to increased revenue and new products if these companies had a product vision to begin with. But they don't, so people get sacked.
If the market had been saturated then there wouldn't have been any (hypothetical) revenue growth which is what the comment above was arguing.
Personally I don't think there was any revenue growth to begin with. They are spending a lot on AI and haven't seen any ROI but for reasons they prefer to fire people and keep investing on AI.
This is simply a symptom that the company doesn't have good Quality Control processes in place.
AI-produced code is good but it's not so good that it can replace hand-crafted (or heavily supervised) code written by the type of engineer who works at Cloudflare.
What's really happening is that a few employees realized they can game the system by turning on a firehose of AI slop and pushing 10x the LOC than any other engineer (with or without AI), because there's no one to tell them to stop, and in fact with a management that actively encourages this.
> What's really happening is that a few employees realized they can game the system by turning on a firehose of AI slop and pushing 10x the LOC than any other engineer (with or without AI)
Did they figure out how to game the system? Or was the system set up exactly with incitaments to produce exactly this outcome?
> The fact so many orgs opt for immediate greed over long-term growth really is its own canary that leadership and governance both has failed the marshmallow test.
Why do you think it's greed? The company's stock is down and they just missed expectations on their last earnings report (unheard of in big tech in the last 2 years).
This really sucks. I loved this job. I'm an EM and I was trying to hire more people because we're so busy with everything we needed to do. My teams products are something like 95% profit.
Really going to miss my team, they were wonderful to work with. Secretly hoping they'll have to rehire.
I refuse to believe it was about AI. Coming from the inside, the bottleneck was never code. Seeing who is being laid off, especially on my team, it's the people who make things run.
They will just expect a lower wage rate. There's some tacit collusion going on here.. they are using LLMs as a vehicle to address the price that comes with the true shortage of software engineers. You seriously dont think they talk about this behind closed doors? of course they do.
My stance is this: Fine, maybe you need to restructure for profit reasons. If that is the case, then it is also beholden upon the people doing the layoffs to understand their responsibility in that.
In an ideal world, a layoff of this scale would also require a shakeup of the management that let it get this bad in the first place.
What's more, the higher up the chain, the less onerous the layoff for the individual getting laid off.
Why should people who are profitable to employ be laid off as well?
It just sounds like you're upset and want to hurt whoever you feel is responsible for making you upset. That's not a productive stance to have on important topics.
I promise you there are a ton of companies desperate to hire talent right now. It's hard on both sides of the market. Lots of noise, but there is demand for this supply. Unfortunately, that means personal connections are more valuable than they used to be, just to get the ball rolling.
Almost 99% sure that They hired a consultant firm (MBB) that told them who to cut; this is pretty standard practice now at public tech corps. Especially if EMs weren’t in the loop. This looks like purely a margin improvement exercise thats hiding weaknesses in the company’s financial performance.
I’m sure they don’t know what they are doing or necessarily care, but I’m still curious what the consultants even claim to be looking at to make the list? Job description, git activity, team level profitability, salary, etc?
This style of layoff seems far more common post-2020 than targeted "restructuring". I've lived through a few layoffs now, survived most of them, but each time and at each company I've gotten by on an apparent roll of the dice and nothing more. Every time I've seen some truly important ICs get let go, their EMs having no input.
I really don't know. My org now has 40+ engineers with 2 managers. Down from 6. I really don't know how they will do it. Each one of us were handling critical shit, and desperately needed more engineers. PMs made things run and they got hit even harder
No one had any idea. My director got the same email
> I was trying to hire more people because we're so busy with everything we needed to do
That’s how it was at my previous company also. If you asked any engineer there they’d say “I’m incredibly busy, and I need more headcount to get through the things on my plate”. Then they laid off 40% of the company because AI had made everything so efficient shrug
In my experience, companies never value transparency. And it's doubly true for companies that boast about transparency. Obviously, it's within their authority to cut head count, but they've also obviously made some kind of major strategic shift either to cut costs or abandon some lines of business and they are not being upfront about it at all. The stock is up 111% over 12 months. They don't seem to be in any danger of crashing or collapsing.
I know of 4 teams in Cloudflare One, who lost EMs, PMs and engineers in really critical connectivity systems. Our list of things we need to do is years long. Many of those are needed for reliability and scaling.
They quietly stopped hiring months ago and I figured things were not good. My mistake was thinking my group would be a little safer being profit drivers and big deals...
They are in a great position to generate a lot of value without rising prices, they haven't realized it yet because what they have to do is pretty boring.
There was an recent article on X with an interesting take - it could be that companies are doing layoffs not because AI is making them more productive but because it hasn't. Their costs have gone up paying for expensive AI but haven't seen any revenue benefits to offset it.
This genuinely wouldn't surprise me, and I need to go back to looking at balance sheets to see if I can sus out the validity of that narrative. As AI subsidization ends prematurely and costs skyrocket, we should expect to see those costs reflected in the operation statements of major customers.
Since I had Coinbase up for review already, I decided to peek there first for any sort of correlation. In 2023, their "Technology and Development" line item shows $1.32bn going out, and by 2025 it'd ballooned to $1.67bn. This is despite headcount actually contracting by almost a thousand people between those two statements, which would normally mean a smaller technology spend since a lot of corporate software is seat-based nowadays. This suggests that yeah, actually AI spend is creating a heavier drag on the balance sheets and it's being offset with layoffs since the "job replacement" narrative is strong. That said, I'd need to check dozens' more balance sheets to draw any sort of industry-wide conclusion.
And to factor in other infrastructure costs that's become more expensive too, such as hosting or hardware.
So unless you can isolate AI spending from others that's not going to be convincing.
Rings true because now teams end up building a lot of things that may or may not have alignment to customer/business needs.
The slow part has always been figuring out exactly what the customer/business actually needs, not the coding. Now teams are throwing money at tokens without solving the "who's buying this?" part appropriately and end up just building excess.
They are laying people off because the cost of financing have gone up. The risk free rate is now almost 5%. For equity financing you'd need to show revenue growth models that allows repayment at that rate plus equity risk premium (which is quite large for new growth companies).
So the CFO makes a model that allows for this and for sufficient ROI they need less people to be more productive. This mechanically forces them to lay people off.
Of course laying people off might actually not improve productivity, but they need this to have chance.
They're laying off the people who can't produce a minimum of 2x with AI, and keeping the maximalists with no life outside of work barely keeping up with the 100k LOC a week they're shipping to prod.
Suits have an idea of what the New Model Coder should be, and it's not people who don't burn through 100,000,000 tokens a week.
The promise of AI gains with fewer people is what's triggering this - before, you needed ~1 coder to do ~1 unit of work. Suits now think you only need 1 coder to do X units of work because LLMs.
This is no that far fetched...
I don't think it's that common that a customer sits on the fence and says "If only company X had Y on their feature list I'll be a paying customer". So the speed at which the company now runs through its roadmap does not equate to new customers joining.
Personally, I think AI is just a convenient scapegoat for these mass layoffs. Also, these kinds of announcements contribute to sustaining the AI hype which all tech investors benefit from. And investors looove hearing about mass layoffs, stock goes up every time without fail.
investors are not some nefarious monolith cheering for companies to make decisions based on how it benefits The Vibes. they're analysts assessing business decisions.
It went down on poor earnings call. Layoffs were probably an attempt to soften the blow. Hard to tell what was the effect, because the two happened simultaneously
This is the simplest and almost certainly correct answer.
I’ve seen this at a number of public companies, and is a reason I hate working for them. These decisions are always unbelievably short sighted and ruin companies in the long term.
I wouldn't argue that it doesn't give any benefits. However, it's not worth the current cost unless you already own RTX PRO 6000 to run any reasonable LLM. I'm using Claude Free and I'm happy with what I get, especially for the cost of $0.
I'm eagerly waiting for the prices to come down so I can upgrade my PC to AM5 and run Gemma 4.
Its quite possible that LLMs become housed units like the next PC. Initially it starts off as being a large thing in data centers (like computers did) until they got smaller and smaller. Except I expect the time it takes to get smaller and smaller to compress much more - given that we live in a world with far more resources and risk-taking.
I know it's probably automatic because of the similar titles, but hitting the bottom of the layoff announcement only to be recommended that article about hiring 1,111 interns in 2026 is a reaaal bad look
Not meaningfully, but sometimes 6mo-1y as part of an undergraduate programme to gain industry experience. E.g. I had 6mo in my third year (not at Cloudflare).
Wow, and I had thought they would be one of the winners in the AI era. A lot of SaaS's can be recreated with an agent and some tokens, but I thought the more infra-y companies would be the beneficiaries. I've vibe coded a few Cloudflare Workers and thought it was a great experience. And Claude knew how to use wrangler to do a lot itself.
I interviewed at cloudflare in ~2020 and didn’t get the job - everyone I met during the process seemed really smart and kind though. Would love to work with some of those people
Email me subject “cloudflare” if interested - thomas@ our domain (I am the cofounder)
The AI argument doesn't make sense to me for layoffs. If AI is making the company more productive then there's an incredible opportunity to use the existing workforce to tackle the massive backlog of important work. A big layoff only makes sense if there is no more useful work to do or you're killing products.
AI usage is getting expensive since Anthropic et al are turning the screws, and that money has to come from somewhere. Reducing AI usage is blasphemy of course, so cutting headcount is the only path forward.
Is there no one figuring out ROI on AI spend vs human payroll? I can't make sense of this idea that companies are firing productive employees because they're spending too much money on AI that isn't doing anything for them... they still hope chatbots will be worth it in the future?
The marginal gains are inevitably diminishing (since you pick the lucrative options).
There's a practical rate at which work can be done, limited by all sorts of things like organisation friction, how fast customers are willing/able to adopt new features, and how fast you can learn from it.
Arguably AI can improve all of these, but those improvements might not be happening as fast as CloudFlare are able to pump out features.
Further, this is all exacerbated by upper management having to made decisions at the nth derivative. Meanwhile, salary costs you now. You might foresee vast riches in future, but you have to remain solvent and competitive until then.
These all points towards layoffs. There are many factors that point towards keeping employees.
How to decide? No idea. Rightfully no one trusts me to make these!
It's such a bad time to be laid off right now. The competition is ridiculous. I have to compete with like 100k world class employees. Best wishes cloudflare former employees. I hope some of you make new companies and hire other geeks who are on their butts. A lot of us at other companies got the boot with no severance or early stock vestings. It could be worse!
"We are reorganizing for the agentic AI era" reads better than "our gross margin is compressing, our SBC is too high, and our growth is decelerating." Both descriptions could be true; only one gets you a flattering blog post.
Their AI costs have increased 600% but this hasn't translated into actual revenue. Also they are probably projecting AI costs to keep growing. They've done the math and at some point it is going to affect their bottom line.
Reducing or limiting AI usage would be inconceivable given Cloudflare itself has invested on AI and is selling AI services. Instead they've opted for reducing about 20% of their head count.
I don't think so. I think this is a common narrative in Hackernews when layoff news are shared. All the people I talk to in the industry positively confirm a boost in productivity. Its contribution to actual revenue could lag but it is present and confirmed by many.
Nah, even insane token costs don't come close to the costs of labor.
Most likely this is just 'AI-washing' - dressing a layoff for economic reasons (such as propping up their shrinking margins) as something more palatable to investors (AI).
I dislike the title because it doesn't clearly state it's a layoff. "Building for the future" gave me the impression that it's about some major new initiative with a roadmap outlining plans.
Yes. We've since changed the top link to a third-party article. We prefer to do this with corporate press releases* - this is probably the #1 exception to HN's "please post the original source" rule (https://news.ycombinator.com/newsguidelines.html). If anyone sees a better third-party article, we can change it again.
(Edit: it's not really an exception because the purpose of a corporate press release is usually to obscure the main story, which means it's misleading, so by HN rules we should change it.)
(Edit 2: I feel like I should add that this isn't specific to Cloudflare! It's literally a generic problem.)
It's interesting how every time there's a layoff, the blog post always has a title like "Preparing for what's next" or "An update on our workforce" or "Getting ready for the agentic era"!
I’ll never forget how when I was at Google, every email with subject line “An update on X” meant X was getting axed. Like, just say so in the subject line…
> "Building for the future" gave me the impression that it's about some major new initiative...
If you'll believe them, it indeed is:
... [the Leadership at Cloudflare] have to be intentional in how we architect our company for the agentic AI era ... reimagining every internal process, team, and role across the company.
... [This layoff is] not a cost-cutting exercise ... [but] Cloudflare defining how a world-class, high-growth company operates.
... We don't want to [mass layoff] again for the foreseeable future.
... [Cloudflare] cannot rest on the workflows and organizational structures that worked yesterday. We're confident that [Cloudflare] will be even faster and more innovative [after layoffs] ...
They're architecting their company for an agentic future? They're reimaginging the definition of a world-class, high-growth company? They're not resting on the workflows that worked yesterday?
blegh
What the hell does any of that actually mean? Like in real life words? Because that much corporate bullshit really sounds like it is a cost-cutting exercise.
It looks like they are using the "agentic AI era" as an excuse to restructure in order to boost margins. GAAP gross margin dropped ~5 points YoY (76% -> 71%)
Whatever the play here they can’t be angling for any external PR or internal morale boost. What if they wrote: “This is a tough economy and we have to tighten our belts.” Maybe that’s naive of me. Bad signal to investors as opposed to insignificant employees and commoners (PR)?
But contrast with this:
> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
What is this even saying? We use a lot of AI. And not just for other people... for ourselves. This means that: we need to be intentional?
What is a regular, not-investor, person supposed to glean from this? We’ve hit the automation jackpot: some of you will be fired, some of you will get more work for the same pay?[1] Along with shoving your face with euphoric buzzwords “AI era”, “supercharge the value”.
I must surmise that whatever PR and internal morale blow (?) matters so little to them. They are not at all afraid of any backlash from any lowly people.
[1] Again. This paragraph isn’t saying anything beyond that they are using AI and ho-ho things are a-changing. So one has to guess.
"We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere."
As an English enthusiast, I'm getting very frustrated at how the language is consistently abused in executive communications to write words without saying anything.
The implication that is NOT said is that suddenly 20% of people were sitting around without any work to do because AI was making everyone so efficient and productive. This does not, however, seem to be the reality, based on conversations within the company. It appears we have yet another case of economic downturn disguised as increasing velocity.
Except for one small, very tiny, itsy-bitsy problem. We humans are very bad at understand the second and third order effects of events. Really, really bad. First order consequences: "Oh we don't need people anymore".
Do I know the second order effects? Probably not. But at least I know they will be there.
2008 really wasn't that bad if you were in tech...
No idea about 2001, but I've heard it was fairly rough. More recently I've seen people say now it's harder to find work today, I think in part because in 2001 it was mostly tech companies laying off talent, while corporates who were less impacted by the dot-com bubble were still building out their engineering teams.
The problem with the 2001 dot com bust was that it came on the heels of the telecoms downturn, so the two biggest (at the time) tech sectors were in trouble simultaneously.
Yes, there was still corporate IT - and some areas like finance were positively booming. But for online retail, media, advertising, etc it was a wasteland for 4-5 years. Plenty of people never found a way back into the industry.
To me, it felt much worse then than it does now (though perhaps the USA is being hit much harder at the moment).
2008 did hit tech but, outside of finance, the shock was over much quicker. The effects on the bricks & mortar economy were more obvious, though, so it got covered more in the media.
2008 the global economy came somewhere between hours to days of completely crashing if AIG hadn't been bailed out. Other than Covid, it's only the second time in the past 50 years unemployment hit double-digits, the other time being the early 80s recession in the wake of the 1979 energy crisis, which saw inflation go as high as 13.5% and the prime interest rate hit 21.5%. You're probably only concerned about your own industry, but even now, unemployment is still around the lowest it's been since WWII outside of the past couple of years and the late 50s.
It'll be another 40 years hopefully to get a full lifetime of experience and see how I ultimately feel about this, but right now, my sense is software saw a huge boom in the 2010s, a la aerospace in the 60s and finance in the 90s, and it isn't going to die, but that boom was never going to last forever, either. Being a specialist surgeon was always the only true close to guarantee you'll make half a mil annually with supreme job security. Everything else sees booms, busts, regional disparities, and power laws that make it hard to even talk to each other about it because nobody's experience is universal. Even now, in my particular niche of the industry, I don't know anybody who's been laid off. My own company and our competitors are not exactly drowning in cash (I work largely on commission and it's been a terrible quarter), but we're expanding headcount, not reducing.
Conversely, in the 2010s as software boomed and I did terrifically, basically my entire family is in trades and it was totally different for them. Drastic cyclical instability, projects started but then canceled all over the place, injuries, bankruptcies, drug addiction, prison terms. But that's also in California. I live in Texas and construction here seemingly mostly stayed in the boom state. All the tradesmen I know from here rather than family did much better. We also had roughneck as a lucrative fallback option for anyone that didn't mind living in the middle of nowhere thanks to the fracking and shale booms. Computer geeks from 2006 to 2021 or so also had that kind of easy skill transfer fallback thing thanks to the boom in computational data analytics due to advances in data storage and machine learning technologies.
We might even do well to remember that hyperscalers drowning in ad money for the past 20 years had a practice of intentionally overhiring to hoard talent but not give them anything productive to do, putting them into restrictive NDAs and non-competes largely to prevent them from starting their own companies or working for competitors. If that practice is ending, it floods the labor market, driving down wages, and reduces industry-wide employment metrics, but it's not death of the profession so much as ending a market distortion. Maybe it even supercharges entrepreneurialism, but right now we just seem to see a boom in the "solo indie dev" putting out reams of slop. At some point, people have to actually work together and have a real product vision that solves a problem other than using AI to make dev tools to harness AI for making more dev tools.
Isn't the most likely explanation here that they needed to show in their earnings call how their bet on becoming AI infrastructure is leading to high revenue growth expectations, and that isn't happening (yet)?
The stock is currently at -17% in after hours trading.
So you need to do something that's good for your margins to show investors.
Letting go 1,100 people into a bleak job market. Absolutely awful.
It wouldn't shock me if people formerly in tech have changed careers entirely, seemingly every tech-focused company is laying people off in favour of AI.
Clearly if AI were the productivity booster that we're told it is, you'd see hiring into it, not firing. Though I guess on the call Prince did say he expect end '27 to have more employees than for any of '26. Anyway.
Wow, the way Upwork is handling this seems really bad. They announced the layoffs today, but nobody will know who is being let go until next week! Sheesh.
Makes sense to do these things. To realistically make it through this paradigm shift you need to organize into a thing that can exploit it. That inevitably requires eliminating teams that don't fit into the new picture. The severance package seems quite generous. Hope everyone lands on their feet.
It's not that individuals are not useful, or even that their roles are not useful. It's that you have to structure your organization to be able to exploit a coming wave, and existing mechanisms and operations just get in the way. By the time Netflix shut down the DVD business it was making $80 m in revenue and the margins on that business were some 50%. But if you think the writing is on the wall, you're forced to act.
Doesn't mean the people in the DVD-mail-ops sides were bad at what they do. The world had just changed and the business became different.
Cutting salaries to pay the AI costs for the remaining engineers. Going to be rough as this trickles through the entire economy over the next 10 years.
I know this is cold comfort, but in times like this, it can be a good idea to start your own company. Cloudflare itself was founded in the wake of the GFC (post-2008), when tech was dead as a doornail. The best time to start something is when awesome people to work with are unemployed.
I'm sure this is going to happen a lot to big companies, with AI they are all going to find they have too much staff and are not likely to benefit from a higher pace of development. Smaller/Mid size companies on the other hand are likely limited in how much staff they can take on and AI just accelerates their plans (I'm in a company like this).
My response to this, as a generally satisfied CloudFlare customer who was excited to try out agentic email, is that it's not a good time to increase the amount of business I do with them.
Really sorry to see the news about the RIF. My thoughts are with everyone affected.
If you (or someone you know) were impacted and want to stay in the distributed systems or data plane space, we’re doing a lot of work at Kong ($2B valuation API & AI governance company) on high-performance proxies, control planes, and Rust, Golang, etc. (I used to work on Cloudflare's edge proxy project)
Happy to chat about the roles or just the tech stack in general if you want to geek out. Feel free to reach out: datong#konghq.com
Why are they laying off anyone when you got 500 million plus in pure profit. The tax system needs to be reworked to not incentivize layoffs. Major taxes should happen to support the well fair system in order to support people laid off. This is a stupid system we live in.
I don't see how laying people off isn't inherently and always a "cost-cutting exercise." If they had an unlimited budget, they probably wouldn't be laying them off, right?
Maybe it's supposed to mean that it's not... something more specific?
With the hiring 1111 interns thing, I think these companies (amazon as well) need to realize this is doing anything but inspiring confidence in those interns. Instead of being excited about going there, more of them would opt to go elsewhere instead of returning full time, or if they do return full time they'd be in fear of being let go next.
Worst part about the ai era is that so many are convinced they can and need to be on top of it to the extent of losing their core competency while mass producing trash
It’s good stuff but there’s room for a lot of things
It’s not like this is a factory floor where you process something coming in and AI suddenly makes the process more efficient and people are idle.
Every team in tech world has infinite backlog, you don’t fire 20% the minute someone manages to close a few tickets.
Companies never want to reduce productivity unless they need to cut spending or increase profits. In other words, if AI increases productivity that’s a direct win they can use to beat their competitors. You can’t spend money you don’t have, but you want to spend the money you do have as point at there work to do, which there always is.
> unless they need to cut spending or increase profits
yes, so basically always? the situations where companies don't want to do this are very rare.
I understand your broader point that doubling down on productive things is useful. But there's no limiting principle to that idea.
The obvious reality is that businesses are trying to find a sweet spot between expenses and productivity. It's not always the case that slashing spending is worth it. But it's equally naive to act like being able to do more with less shouldn't make you want... less
The level of group think here is unbelievable. Any opinion other than this is down voted immediately.
A whole page of people bargaining and not wanting to face reality.
At my work, our healthcare plan renewed May 1st. We have great insurance. The CEO told us that the healthcare premiums just went up 50% so enjoy this year because it is going to be less great next year.
It doesn't matter how many people have a type of religious faith that this has nothing to do with AI and is all posturing.
The reality is AI is going to get cheaper in the future and I am just going to keep getting more expensive as an employee as we circle the drain in this health care and debt death spiral that everyone is also in complete denial of with no political will to do anything about.
S&P 500 is at an all time high. The real layoffs haven't even started yet.
Yeah, I just don't understand the thinking here on HN anymore. (My account is 15 years old)
It was clear to me even before ChatGPT arrived that software was eventually going to go the same way agriculture went. We will simply need fewer people to do the job than before.
I don't buy that AI will completely automate away all software engineering. I think if you're not in the top ~40% skill wise, you're in serious trouble and have a bleak future.
Many CxO made a decision to spend $$$$ on AI; that's their bet and they're are adamant about it. Money should come from somewhere and layoffs is the easiest way to free some budget in a software company. Was it a good bet only time will tell.
The sre team I was hired onto last month, just lost 2 of ~12.
Cynically: our team hired two (me, senior, and a junior) and then we lost two (staff, guy who had been around since the founding, and a senior+ guy)... I kinda assume they baked in some of the layoff decisions into their past quarter or two of hiring to reduce seniority, and salaries, overall. Really short-sighted.
I was still needing to get some 1:1s scheduled with the guy who'd been here for Forever and knew which closets had all the skeletons stashed away. Can't do that now.
All the AI stuff is just noise to make it sound better - the real issue is the economic downturn.
If anything, AI makes each employee much more valuable because they can be much more productive and most big companies always have stuff that needs doing and opportunities for growth. So it's a sort of Jevons Paradox[1] situation but where human labour is the resource.
Expenses were more on purpose, they amortized a bunch of hardware depreciation now instead of over 5-7 years with the new tax changes. This is pure greed
Flippant sarcasm that they're pretending this wasn't a financial decision, and was entirely about being ready for the amazing productivity gains of ai they've already seen, expanding across the business.
Any other engineers just living life frozen at this point. I am unable to make any life decisions because it seems like I won't have a career in the near future. I am unable to purchase a home to settle down for my family, because dad might not have a job next week. I know I am fortunate to have a job, many don't, but fuck if this career isn't the worse thing ever for my overall health and happiness.
Yeah I'm there with you. I got lucky as a kid with delving into this as a hobby and it turned into a professional career. Thought we could change the world for the better, what we made instead was social media cancer and LLMs that can pretend to make everyone 10x more productive. I loathe it.
Absolutely. News like this is so hard to ignore. Nervous as hell to drop big money on things the family needs right now. Grateful to have a job, but life overall was just better in almost every sense before AI became part of our daily vocabulary and layoffs occurring every couple of weeks.
I've been out of work since almost a year ago after getting laid off and the same is true for a lot of my coworkers; the job market is absolutely broken in half for a lot of different but related reasons. Thankfully I have significant savings and low costs so I can just coast and do stuff in my own time, but the same hasn't been true for others I know.
Frankly I fully expect people to get even angrier once they become unable to meet the bills and companies still tout the whole AI line.
I find it surprising that the word "incident" doesn't yet show up on this page. Cloudflare had at least two nasty incidents a few months ago. It certainly shook my confidence in the company's ability to run its infrastructure.
That's 2 major layoffs this week (Coinbase being the other). Is there an underlying common reason for this? And is it indeed AI-driven productivity as both companies claim?
There's multiple simultaneous narratives: the industry-wide one of slashing well-paid tech talent under the guise of AI productivity boosts, and what's actually going in at each company.
Cloudflare is an outlier because the company doesn't actually make money at present; their past three annual statements show net losses in the tens to hundreds of millions of dollars. Not hemorrhaging cash per se (their cash reserves alone could cover ~9 more years of losses), but still enough to warrant some cutbacks - and AI is the current scapegoat, thus they finger AI and throw folks out the door.
Coinbase's story is different: they're making good money, but their industry is inherently volatile. Again, recent volatility in the crypto markets related to...things...is dragging down long-term prospects for currencies, while ongoing trades are broadly just insiders doing insider things or exiting their positions for liquidity. Still, their share price is down 27% over 5 years and 18% YTD, so they also need to pump their share price so the executives get paid; layoffs are consistently rewarded by the shareholders, thus they axe part of their workforce for the bump and fingerpoint to AI.
Never take what a company says at face value, and always check their balance sheets. What Cloudflare did sucks but could be warranted to some degree; what Coinbase did has no justification whatsoever beyond naked greed.
> Cloudflare is an outlier because the company doesn't actually make money at present; their past three annual statements show net losses in the tens to hundreds of millions of dollars.
Their free cashflow is high; they're choosing not to report a profit. I don't think it's useful/accurate to say they don't make money.
Don't get me wrong, they may be doing a layoff to boost margins or enter GAAP profitability but the company revenue exceeds its operating cost by quite a bit.
> First quarter revenue totaled $639.8 million, representing an increase of 34% year-over-year
So they're growing 34% annually.
> Free cash flow was $84.1 million, or 13% of revenue, compared to $52.9 million, or 11% of revenue, in the first quarter of 2025.
Cash, cash equivalents, and available-for-sale securities were $4,163.9 million as of March 31, 2026.
...and they have $84 million free cash flow in one quarter, and it's consistently pretty good cashflow.
And they have $4b of cash or cash equivalents stockpiled. It seems pretty healthy to me.
Its quite filthy but it benefits them all to lay off lots of people to reset the wage rate in the market... Im sure we will see a wave of re-hiring when this stuff starts to blow over but many initially will be at a much lower wage rate.
Whenever someone brings up ZIRP, especially someone with a username like yours, it's an indicator that they have no clue what they are talking about and like to regurgitate things they read on the internet.
> Also the US economy is collapsing, that probably has some relevance.
I think there's also a certain permission structure that once one sufficiently large org does a big round of layoffs and doesn't get punished, a bunch of others will run the same playbook. We've seen this before -- back in 2022 when Elon fired like half or more of Twitter and the service didn't immediately implode, it gave other CEOs permission to do massive layoffs in the guise of "efficiency" even though the real reason was ZIRP was over. Now they're claiming it's because of AI when it's really that their margins are eroding because the overall economy is slumping and they need to offset AI spend.
TBH I'm surprised people don't see the obvious result of this collective madness:
1. Force every engineer to use agentic AI to the max.
2. Constant anxiety at work due to the threat of job loss and unreasonable expectations from management/business.
3. Engineers start yoloing everything using AI while wasting tokens.
4. Speed goes up in the short term, while quality and expertise degrade little by little, all while bleeding money due to AI usage.
5. One year down the line you have a company full of engineers that don't care and a bunch of slop-bloated, bug-ridden products that the customers don't want, and a massive bill.
IDGI. How is a company that owns a bunch of infrastructure you almost have to use to put your service on the internet not more profitable such that they have to do layoffs?
> Matthew has personally sent out every offer letter we've extended. It is a practice he has always looked forward to because it represented our growth and the incredible talent joining our mission
Who gives a shit if you treat your staff like this?
I will add cloudflare to the list of companies that I’ll never work for. Shame, because it seemed like an interesting place
Companies like cloudflare operate at a very critical spot as of today. They manage the end points where TLS terminates for most of the internet traffic which means that they have access to all the information flowing through them in clear. When a company is so much motivated by the profits then it would not be too far away when they start selling all this information. With this much centralized control, they can easily turn to abusers instead of being internet gatekeepers for profit. Firing so many people is bound to disrupt the operations, the only question is how much can they can hide/manage.
I think this is the reason why the detailed definition of companies varies, the motivation and regulation on a company varies too. Absent the regulations, financial institutions would have run off with the money by now
Screw Cloudflare. I went through a bizarre 3+ months hiring process where I would have a disconnected, vague 30 minute interview with someone every couple weeks. Then, suddenly rejected for no real reason given.
Their hiring process is remarkably bad for a company that otherwise is so well run. My most recent experience was them throwing a workday link at me to fill something out before we even had the initial phone screen and the forms/ui was so poorly designed that I stopped responding to them.
They want to polish upcoming employees into getting more used to AI tools usage but they don't want keep burning cash on experienced ones. They have to establish more YOY growth. Looks like everybody has to justify in the market why they need AI agents more than employees.
The message to every Cloudflare employee is clear: you'll be there for the company when times are hard. But the company will not be there for you when times are hard.
It does not matter if the way we work has changed, or AI adoption has increased, or aliens show up. This is a demonstrated lack of loyalty that would result in immediate termination of the situation were reversed.
The important take away for everyone else is do you trust Matthew Prince to always take the high road and do what is right, combined with the fact that they man-in-the-middle all of your websites encrypted traffic? What happens when revenues are down and the shareholders demand blood again?
You only have to be there for the company in that you do work for them and they give you money in return. Any tech guys working for them will have received plenty of money. I feel sorry for the non-tech people though (HR, recruiters, etc.).
This announcement is bullshit though. Banging on about transparency and then not even trying to give a reason. They didn't even try to say it's because of AI! They just say "AI is important. We're laying off 1000 people." Wtf.
Interestingly NET is down 15%-ish in extended hours trading and was even down 20% at some point. Many times a stock will make a positive move when layoffs are announced.
Cloudflare is a growing company by most metrics so if efficiencies through AI were the reason for the layoffs they'd just take the boost and grow even faster.
It all doesn't check out and I think the real reason for the layoffs and the negative sentiment by the market on the news is that their revenue growth was not as fast as their expenses and they realized they overhired. Leadership doesn't want to dive too much into the red even if it would mean bigger growth down the line. They are now beholden to the near and mid term stock performance.
I've had the chance to talk to some SWEs working at Cloudflare off the record in recent months and the one concensus I heard was that there was many times some tension between the boots on the ground and the decisions from senior managment but of course nothing they could do and especially after this they'll make sure to be quiet should they remain. There seemed to be a lot of pressure to deliver features and new products but quality has been left behind which means the SWEs felt pressure to deliver while also having to deal with the ensuing issues to resolve.
Either way I wish everyone affected the best and a speedy job hunt - there'll be quite a few really good people on the market now for no fault of their own.
Cloudflare is transforming into yet another surveillance company.
I always see this "Cloudflare ensures you are not a bot"
soon may change to "Cloudflare ensures you have a digital ID"
They will not need so many people for this and there will not exist competition to bring better products when people are fired massively and are crippled by financial problems.
AI for me is an excuse. Not the main issue.
It is a strategic transformation to ensure dominant position by killing off competition. Afterall employees are always viewed as threat.
They make it quite clear that these layoffs are in response to adapting to using AI at the company:
> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
The rest is hand-wringing about the emotional weight of the decision and what employees can expect from the process.
What remains to be seen is whether relying so heavily on AI will have similar outcomes to what we've seen from Microsoft and others. Which is to say, is now the time to stop using Cloudflare?
What the hell!? Cloudflare is absolutely killing it and now they're laying people off! I know some good people there with deep expertise and I hope they're not affected.
I’m finding this a little difficult to square. If things are radically changing within the company and they’re rearchitecting how the company works, wouldn’t they start with a transition period? Letting 1k people go, many of whom will be important parts of the organization, while simultaneously making radical changes in light of a radical rate of change over the last few months, seems very high risk.
Taking everything at face value, does anyone have thoughts on why this change makes sense now vs. in 6 months? Are they ripping the bandaid off or… due to the size of the org?
Someone who knows the product deeply and has grown it into what it is today will always stay valuable.
AI can replace people at a low level because they are seen as a cost. While people at the top are better connected.
CEOs travel a lot, probably subscribing to 100 mastermind groups where CEOs of other companies also hang out, playing dozens of mind games and strategising all the time.
Such people are hard to replace. The average employee's role is finite, and they aren't taking much risk; therefore, it's trivial to get rid of them.
Cloudflare's stock price has been disconnected from reality for a while.. the only one that's wilder is Palantir which at least has revenue growth numbers that are very impressive.. meanwhile Cloudflare's enterprise value vs next 12 months revenue and revenue growth just don't justify this completely out of whack market valuation. I feel bad that the company has to try and sustainably justify that. It's incredible to watch the velocity of their launches. But I suppose the reality is most of them are just not selling
in a ten 10 years like this ai enthsiasts crowd the world, we'd be getting starving cuase nobody wants to grow plants and be farmers. only chemical food and dirty water that's ai advantage
corporation ai monsters now will be brainwashing you and we'll be under control of ai .... that's a pity end of humanbeings but with greedy governments and bankers, only way we can aford now is to live somewhere at the end of the world in Nebraska build a barn and never go to big cities. all i want for my children is pure air and water but this fecking boots on the ground like us army marching in ukraine and nato shaking nuclear weapons around my home.
> That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
So you suggest they give out free money to people they don't need?
If you believe it negatively impacts Cloudflare, feel free to start a competing company and hire all those; it's free market after all, anyone can raise money if you can show there is any point in your vision.
What's funny is software guys have forever automated jobs of others. Remember? Automating e-commerce logistics? Automating taxis? Automating vacuuming of floor?
But when their own job is in danger, "think of employees" comes into consideration?
Feel free to start an Indian company. But you don't do that. You come to the West like Nadella and Pichai and take away the jobs in Western companies, genius.
Yes I remember the British in India. They were rightfully kicked out. Is the point of mentioning this that you want Indians to be kicked out of the West?
it heard like AIC album 1995, hey now i'm chatting here from Moscow.. Jesus save our world! we're tide of politics and 21 centures. slow down smoke more stuff
20% of the workforce is currently being utilised for testing purposes by various companies. (just like we deploy Canary to 10% traffic for test)
In reality, approximately 5-10% of the workforce is equipped with AI technology and can now autonomously manage the entire company.
I am pretty sure CEOs can already see it! Companies create a great deal about the revenue per employee.
Downvoting my statement will not alter the situation, Claude and GPT-5.5 have the potential to replace most system administrators, DevOps engineers, copywriters, support personnel, and other roles.
I have observed this phenomenon in private product companies in India, where I serve as a consultant to multiple companies. I have noticed that 5-10% of the workforce is sufficient to ensure the continued performance of products, with reduced communication overhead, faster updates, and improved reliability.
I also have several side projects that encompass a wide range of responsibilities, so I am not merely a passive executive role.
In India, it has become increasingly challenging to secure jobs in the DevOps, system administration, and frontend domains.
In my opinion, a backend engineer’s job is the most difficult to replace at present, particularly if that engineer possesses a deep understanding of market and product dynamics.
This is awkward.
Exhibit A - September 2025 - "Help build the future" - Cloudflare hires 1111 interns to "help build the future" [https://blog.cloudflare.com/cloudflare-1111-intern-program/]
Exhibit B - May 2026 - "Building for the future" - Cloudflare lays off 1100 people, about 20% of their workforce to "continue building the future" [https://blog.cloudflare.com/building-for-the-future/]
I'll finish on this quote: "The future ain't what it used to be." — Yogi Berra
This (from the September 2025 post) now evokes the Curb theme:
> Like you, we have seen numerous reports that more and more firms are capping their total headcount in favor of leaning on more AI tools, leading to downsizing their intern and new-graduate hiring. This is resulting in increased sidelining of new college graduates. But we think this misreads the moment completely, so we’re heading in the opposite direction.
> While we are excited about what AI tools can help do, we have a different philosophy about their role. AI tools make great team members even better, and allow firms to set more ambitious goals. They are not replacements for new hires — but ways to multiply how new hires can contribute to a team.
> AI tools make great team members even better
This is the predominant (public) talking point. And it’s true.
But along with that: when you have effective people becoming even more effective with AI, it becomes glaringly obvious who the INeffective people are. At which point it becomes hard to justify keeping those people around.
(That often includes people who are otherwise effective but aren’t utilizing agents and are therefore losing their edge.)
I’ve seen managers hiring people with an intent to lay them off when winds change to protect themselves and their close circle. I can only imagine they’ve had great KPIs in both cases: first for scaling the team, and then for cutting costs.
This is completely acceptable. When was the last time you saw any job seeker seriously enquire about such practices in interviews or at the application stage?
A lot of people here and in the industry in general seem to optimise for compensation package and put blinkers on themselves for other factors that are definitely relevant.
Companies aren't penalised by candidates for such practices. I'm not saying it's good but it's astounding to me the number of people who for example optimise entirely for salary and then are shocked when the working conditions are very poor.
People game companies and companies will game people in return. Murray Gell Man amnesia will kick in and next week there will be thread about how CloudFlare is a great place to work for software devs because you can earn 20% more than other comparable companies with no reference to how things like job security or working conditions are measured.
> People game companies and companies will game people in return.
You have cause and effect entirely reversed.
> When was the last time you saw any job seeker seriously enquire about such practices in interviews or at the application stage?
- “Are you hiring people just to fire them a year later to protect yourselves?”
- “Yes we do”
It’s a bit naive to think they’d just own up to it.
How exactly would you ask this in an interview setting? I'm baffled by the idea.
> How exactly would you ask this in an interview setting?
You now know which companies do this.
Every company laying off now has to wear a Scarlett Letter: "we're a layoffs company".
Good luck working in tech for a company that's never done a layoff.
Just Apple (and only "mostly") among big tech?
"Why is this role open"?
Either they will answer directly with something solid like "We're growing the team" or they will evade it which is still a meaningful answer for you. You could probe further with questions like:
"How has the team's headcount changed over the last 18-24 months?"
Basically you're alluding to 'employee turnover' without saying it.
> How has the team's headcount changed over the last 18-24 months?"
“It didn’t change” and it would not be telling much. They are just hiring and firing X amount of people every year.
You know that people just lie regardless of the real intent behind hiring right?
That's not how that works... Please stop being delusional
Naive to think such a question would get anything other than a plausibly ambiguous lie.
Back in the late 90s a senior Microsoft exec explained this to me, they had acquired staff and continued to operate entire divisions which he described as "ballast". In the future, once the stock price increases slowed, they would be heaved over the edge of the balloon basket so that it could continue to rise. I often think about that.
old sysadmin trick: create large file on a disk and in a dire situation when DB runs out of space delete it.
Company internal GDP equivalent increase of a funeral.
It's the natural result of "fire the bottom 10% every year".
If that's the rule in your organization, and you have a core group of people that actually know the systems and get the work done, you better make sure you have 10% padding every year, lest you layoff someone important and their friends all quit in disgust. And since competence and institutional knowledge is built over time, that implies a revolving door of new folks coming in and most of it not making it.
If both sides know it, working as a "churney" can be pretty chill. Like being put on the roof from the getgo.
Maybe 1/10 of the new hires replace 1/90 of the existing old timers. You need some creative destruction.
Workers as cattle. This is utterly disgusting and the way it’s normalized is even more revolting
In management terms a human and a printer are the same. Both resources that need to be managed. I hate it.
Absolutely not--the printer is capex, so it's preferable to the humans who are opex.
We don't send 10% of our printers to the landfill every year just to motivate the other printers.
Using human resources as moat to protect themselves when the barbarians come. Seems to Management 101
It feels like it was the most beneficial implementing better decision making mechanics by replacing manager with AI, not lowly folks doing actual value creation.
LLM models have better reasoning abilities than these folks....
They are not as good at building an old boys/girls network though who help each other into positions of power and wealth. Companies within companies...
300% accurate
Both of those are true assuming the lay offs come from different demographics.
You lay off 1100 who are late in their career for younger people who will work more hours for less.
You're building the future with new fresh people instead of the "dead weight"
> You lay off 1100 who are late in their career for younger people who will work more hours for less.
Yet management always seems to miss the institutional knowledge, and experience, that also walks out the door laying off those 1,100 people 'late in their career'...
It's not possible to cram 25 years of experience into two.
> Yet management always seems to miss the institutional knowledge, and experience,
If they actually miss it they can call it back to work for triple the going rate.
They usually don't though. Those left behind have to figure it out again with whatever new tools they have at their disposal, thus continuing the great circle of corporate life.
Or corporate death if they don't figure it out in time and it is actually important. But even then, the management won't miss anything.
Most of the time, management don't even know what they don't know. As a result, entire America lost engineers and builders and now don't even know how to build rails, factories and rockets to moon.
Relevant post with some military examples as well:
https://techtrenches.dev/p/the-west-forgot-how-to-make-thing...
(Has some AI tells though, probably AI-assisted?)
I'm very sympathetic to this standpoint, but an obvious retort is why don't the engineers become their own boss and do better? What's stopping them?
I'd imagine it's access to capital and resources. I suspect many engineers/professionals (especially in eg consulting or manufacturing) would start their own business if they have the financial stability to do so.
A lot of market forces tend to "naturally" create monopolies/oligopolies. For eg if you're the biggest steel plant you can operate efficiently and keep moderate margins, beating any plants not as big (economies of scale). An independent guy (or even the entire team) can't just open a new steel plant shop down the road, even if the current one sucks.
Haven't software engineering salaries been like 200K for almost a decade? With very little actual need in capital requirements relative to a host of industries with expensive equipment, I'd say of the class of workers most poised to start their own businesses, I'd say you guys are the best placed.
To be a bit honest, I'm a computational scientist who's never seen anything near 100K and likely never will. It's hard to imagine not having around 4 times my salary and not being able to start something myself.
> I'd say of the class of workers most poised to start their own businesses, I'd say you guys are the best placed.
I think your premise is significantly correct; things like launch HN (and even YC startups) are heavily software biased. I suspect you'll find about a hundred product hunt products for every physical kickstarter/indiegogo.
It gets sucked up into housing. So if you're in your early 50s that's fine as you probably brought very cheap. Mid-40s and under? Unlikely unless you were extremely lucky. I'm 45 by the time I've been able to buy housing it has always been peak despite having very high earnings at times.
That's basically the meme, right: You rail against corporations and yet you work for one. Curious.
Anyway in general, corporations are sticky. They save resources through scale and collaboration. Famously this is a problem for free market true believers because if you believe that the market is the most efficient mean of organizing people then you would expect firms to operate internally as free markets (or disappear). There is a whole body of work about it,
https://en.wikipedia.org/wiki/Theory_of_the_firm
In practice you can't just become your own boss and compete against firms.
Engineering and running a company are very different skill sets. Engineers are often not good at Marketing, networking, sales, ...
Even if you are good at those, for many companies, it's more about connections than about the ability to build stuff. So if you don't know the right people, it is very difficult to get a foothold.
Sorry I should have specified, engineer here means software engineer/software developer.
You missed the question entirely.
Marketing, networking, and sales are the job. Or a large part of it. If you don't have connections, knowing how to make connections is part of it.
Accept that there are other skills besides engineering, and they can be just as challenging to learn, and just as opaque from the outside of you don't understand it.
I have AuDHD - there is no way I'm running my own company. I'm a good developer but I need someone else to have the idea and run the business and I can lead a small team to bring it about.
Given I'm now in my mid-50s, things are looking grim. And I'm not getting paid SV silly money. I'm not even getting paid US dollers.
Managing things often requires a different skillset, some want to avoid solving meatspace problems, some are not destined to be good at it.
Capital.
what?
Have you missed that they recently sent a rocket to moon?
They sent a module around the moon. They didn’t send a rocket to the moon. They still haven’t landed and their timeline keeps slipping.
Well, rails get made as well, I think the point was that a lot of things require reinventing knowledge that was previously known.
Or phrase it as reusing exiting tech because "it is cheaper" ending in having to reinvent it because all the people who designed it and made it have gone.
That happened in the reverse way. The government fired and underpaid a lot of people at Nasa ... and Musk hired incredibly experienced people, who became experienced on the taxpayers' dime, to build a rocket, for huge payrises.
The biggest but not only example: https://en.wikipedia.org/wiki/Tom_Mueller (yes, lots of subcontractors involved, however, Nasa paid, with a bonus percentage provided by the US military)
Note that Mueller gives the payment situation at TRW, and the fact that he "wasn't appreciated" as a direct reason to go to SpaceX.
What did you think happened? Does anyone actually believe Musk did the technical design for that engine, just because he claims so? Or I should say he constantly claims it, staying slightly away from direct claims to avoid getting caught in lies (well ... getting caught AGAIN).
SpaceX has nothing to do with any part of the Artemis II crewed lunar fly-by. They were considered and rejected. It was entirely legacy aerospace contractors. SpaceX is under contract for parts of future missions including the lunar lander.
This is the internet. You can’t expect HN or Reddit to be positive, especially around America. It was the same way before Trump was around.
These people and bots have no idea what they are talking about. They’re parrots.
>If they actually miss it they can call it back to work for triple the going rate.
That’s great in theory, it rarely works in reality. Those people almost universally find new work quickly because they’re good, or retire because they can.
In both instances the idea of going back to bail out a company that just screwed you, operating with a giant target on your back when the inevitable next layoff occurs, isn’t worth it for 10x the salary. Ignoring the fact a business of any significant size isn’t approving paying someone to come back for 3x, they’ll just caN the manager for the fallout.
It takes two years to get up to speed on a job. It seems laying off will cost the company time even if they are saving money.
Half of Cloudflare employees have less than 3 years in the company.
Hired as a code monkey, fired as a code monkey.
Do they always miss it, or is it that they are aware, but disagree on the cost-benefit of hiring experienced engineers?
This is contextual on a number of factors. It seems difficult to establish in the general case.
How do they miss them? Companies just move on from what I’ve seen.
Maybe that's why they hired first, and then fired.
Give the new people 6 months to benefit from all that institutional knowledge.
Can't wait for the next couple of outages! Let's see how long it will take.
boomers wish
Lately it feels like it's possible. Freshers in their first job are now capable of taking ownership and shipping full stack features in a few weeks. The feedback loop is definitely shortened - noone appreciates the years spent "googling and looking at stackoverflow" anymore, and frankly, they shouldn't be. Experience matters now mostly at the architecture, and decision-making levels, not at implementation.
I was reviewing some code done by a junior hire at my company last week, and it certainly didn't look like he was cramming 25 years into 2. It looked like he had no understanding of anything he had generated, because it was garbage. Meanwhile this week I've just reviewed the largest single PR I've ever seen, from a senior dev who disclosed it was mostly generated and cleaned up by him, and the code was perfectly fine and it was a breeze to review.
LLMs are a great tool, but more often than not it does show if the person using them knows what they're doing or not pretty clearly. Especially if it's anything larger than a trivial small change.
Yeah they seem to just amplify who ever was behind it.
Freshers certainly can give the appearance of taking ownership and shipping full stack features in a few weeks.
The problem is that "I copied the issue on claude code and then committed the code it produced" is not actually taking ownership.
> noone appreciates the years spent "googling and looking at stackoverflow" anymore, and frankly, they shouldn't be.
Well, I do, and I hard disagree with you there. If the human does not understand what the machine is producing, then I need a different human.
Every time i see a comment chain like this i'm annoyed. In the last 3 decades we never truly found the words to define what kind of skills, problems, and people /-space exist in the industry, and AI has literally added a whole axis to the space so we're more unable to communicate than ever.
Having said that, and feeling more with you than the other guy, there is nothing for you to "disagree" with.
Mediocre was always buggy and broken in some ways, but for all intents and purposes it was good enough. Today somebody with a year of study can reasonably deploy something - for which the appearance of taking ownership and shipping a full stack of features has reached the bar of good enough.
Consider 10 years ago: Did you believe it was more likely that in the quality-distribution-of-software that we would, over time, create proportionally more quality? I dont think so and AI didn't meaningfully change the trend.
It changed the work dynamics, and still is changing, and with our inability to communicate is going to be an annoying mess.
Dont let the annoyances blind you to what LLMs can do for your point in space, or to where most of the points lie for the rest of the world.
I was disagreeing with "they shouldn't be".
I think we should care that our engineers have put the effort to understand the code they are responsible to produce. I don't care specifically about how they get that knowledge (I am using AI to learn myself, for example). But I disagree with the implicit assumption on the statement, which is, in my view, "humans don't need to understand the code any more" (because some fresh out of university might think they understand, but they really don't).
The problem with AI isn't that it's mediocre, I can work with mediocre. The problem with AI is that it produces absolutely stellar world-class code with two hidden 0days in it.
I can't work with that sort of surprise. I'm tuned to consistency, and I can work with consistently bad, but not with "95% absolutely amazing, 5% abysmal".
And I say this as someone who develops exclusively with LLMs now.
> it produces absolutely stellar world-class code
I am using Claude Code with Opus 4.5 and I have to correct it every day. It produces working code but it makes mistakes. The code is more verbose than it should be, misunderstands/ignores edge cases, etc. Daily.
And I am not a stellar world-class programmer. I am pretty average. I just read what it produces.
I'm not talking about some hypotethical scenario - but what I observe. When I started out, us interns were tasked with "nothing". Now the skill floor is so much higher, and I'm seeing freshers accomplish tasks that were previously thought of strong mid-level or early senior ones.
Being old doesn't always mean "dead weight". They are dropping experienced people, so from where are young people are going to get experience?
AI will mentor them /s
Or it is just regular ageism.
Laying off people with experience which only 1% of their younger colleagues will learn because LLMs made it redundant enough is misguided today. If I were a CEO I’d hold on to my 15-20 yoe engineers for my dear life; can lay them off in 2028.
I worked in a company that did that. They couldn't rehire the senior after the junior burned with a bug 700k in 20 min by touching a part of the codebase no one had context for anymore.
Mmmm, fresh people.
Can we juice them?
Isn’t this illegal?
In the United States (where most Cloudflare employees work):
To answer your question: Probably not. Even so, it is incredibly hard to prove workers 40 and older were laid off as a result of age discrimination.> Even so, it is incredibly hard to prove workers 40 and older were laid off as a result of age discrimination.
The only way for this to happen is by leaked private conversations, I think.
So you can’t be discriminated against if you’re less than 40, but that seems somewhat discriminatory (maybe you wanted to be), but that means that you are being discriminated against, but that’s meant to be forbidden.
I sense a paradox.
Only if you're dumb enough to leave a paper trail showing that's what you did.
It seems it would be easy to show a pattern.
You would need some class action lawsuit I’d think? Need a good number of laid off people to join it and you need solid statistics that would convince a jury more than the corporate lawyers would with whatever HR covered their assess on paper have.
Just your average Thursday in American capitalism!
Should companies be forced to retain talent of a certain age group? Should they be forced to retain less competent people? How do you expect this to work?
In Sweden,the Employment Protection Act, (LAS ) mandates 'last in - first out', meaning if there are layoffs due to over-capacity, people with seniority (years of employment) take priority for available positions. This is kind of partioned by profession-group, so yes you can fire nurses but keep doctors, or other way around. (Its been a while since I looked into it, but thats the rough gist of it)
Yes, and that makes working for a Swedish company so much better. You know you can’t just be shown the door at any moment after years of service and you get a lot of peace of mind which is worth more than the inflated salaries in the US. There is still a way to get rid of people, of course, but that goes a little like the Japanese do: just don’t give any important work to the person, or give them a bad performance review. People quickly understand they need to move on and they can do it with dignity.
That also means that a) it's harder for younger people to get a stable job b) the bare minimum of work not to get fired decreases over time, which is bad for productivity.
https://en.wikipedia.org/wiki/Insider%E2%80%93outsider_theor...
If a significant share of your employees optimise in the sense of doing the least of work possible, without getting fired, you have a huge problem anyways. Usually, given the right conditions, people have intrinsic interest in doing a good job. Even if their motivation is more of the extrinsic type, there is more to it than getting paid.
Yes, it only works in a high trust society where there’s plenty of jobs and people actually care about doing a good job (any company will have incentives, people can’t just sit around and do nothing, lots of social pressure too if you’re a slacker). But hey, that’s been mostly true (until recently, I hear immigrant unemployment is really high, while “local” unemployment is close to zero, but the official statistics sit in the middle at around 7% I think, much higher for the youth).
Or if you really want to get rid of someone you can buy them out with a severance deal that is better than standard and hope they take it.
In my experience those people get juicy positions doing nothing useful as they their competence long atrophied due to zero pressure to keep their knowledge up to date. Of course now companies hire "consultants" to work around to issue, so those get fired on a week's notice when money is tight. The warm bodies remain in their chairs until retirement. Inefficiency remains a huge problem in Swedish economy, but no one dares to touch these archaic rules (BTW no minimal wage in a European country, WTF?) due to political reasons, so the immigrants get the blame instead for everything.
Its a choice - work hard with minimal securities, get better salary. Heck, one can do that in many EU places when working as self-employed on contract (if legal), and be paid by just billed days, no vacations or sick days. Its actually pretty good career path in the beginning of one's career in software development, get more money and ie invest in a property. Then get more secure permanent position, coast more and enjoy and appreciate more those stability benefits.
But high economic performance this isn't. Adaptability of market to ever-changing world that certainly isn't neither. Europe is getting hammered by this and things will get much, much worse in upcoming years. We will have to revisit our comfy lazy attitude towards work, or end up being a stagnant place with 3rd world salaries and corresponding QoL.
Switzerland is doing things much better, its sort of in between both extremes and economy is reflecting this very well. But EU leaders egos will sooner accept poverty than that somebody figured out things better than them.
The Netherlands recognized the problems with the last-in-first-out system and requires that after a reorganization, the statistical distribution remains the same. How well that works is hard to say because the level of unemployment in The Netherlands has been quite low for many yours.
What I hear is that Switzerland is a bad example. Many people there struggle to make a living.
> What I hear is that Switzerland is a bad example. Many people there struggle to make a living.
The poverty rate in Switzerland has increased (source:https://www.bfs.admin.ch/bfs/en/home/statistics/economic-soc...) but is defined as:
The poverty line is derived from the guidelines of the Conference for Social Welfare (SKOS). In 2024, it was on average CHF 2388 per month for a single person and CHF 4159 for two adults with two children.
I live in Zurich (by far the most expensive city) and while 2388 (or 4159) would be tight (depending on housing) it would still afford you a fairly comfortable life with access to top quality healthcare and public transport. Life quality wise one could argue that poverty in CH is a better option than a middle income in a lot of European countries.
Outside of Zurich rentals are not even that bad. You can easily get a nice apartment for 1500.- or even less. If one is struggling financially, rents are lower e.g. in Aarau district, starting from around 1000 and you can commute from there. Spending 1000 when the median salary is around 7000 is really not that bad. Low inflation in Switzerland meant other European locations are now at the swiss level or sometimes even above.
Yeah Switzerland has rather few poor people and very strong middle class. And poor ain't some US version of homeless/trailer park living, just lower income, less fancy clothes, shopping in cheaper supermarkets, less/no vacations abroad.
lol does all of European tech companies combined even make more than what the EU brings in from taxing US companies yet?
Why don't you research this and report back your findings. Learning is a cool experience, compared to prejudice.
Just for others, it seems this was already an article so it came up quickly, but for fines, not taxes.
"In 2024, the total income tax paid by all publicly listed European internet companies combined was approximately €3.2 billion. This total, which includes firms like SAP, Adyen, Spotify, and Zalando, was notably lower than the €3.8 billion in fines the EU collected from US tech giants in the same year"
China is hiring engineering talent. US is firing. Nobody forces anybody to do anything. Just pointing out the current state of affairs in the long life cycle of empire. As Ray Dalio says US is very late stage declining „financial capitalism”. While China is early stage aspiring „production capitalism”. It is not like late stage declining USSR needed as many engineers as it did when it wasnt collapsing. USA is a collapsing empire. China is growing.
Making it illegal would be communism
Yes because anything that is good for individuals is communism.
People are feeling more alone than ever. But whatever you do, don't do anything communal!
Anything I don’t like is communism
there's no way 1100 interns are all going to be offered full time jobs
>You're building the future with new fresh people instead of the "dead weight"
If the "future" being built is one that those same interns would be dropped as "dead weight" as soon as they settle into families and refuse to be exploited with overwork, then it's a bad future, even if it's one with more CDN features.
Although, instead, it will be a more enshittified one anyway: they're cheapening your company and the product and lose organizational and operational knowledge in the process.
But the truth would likely be closer to that those fired would be a mix of mostly extra people hired plus some older employees. But instead of "we hired extra X less than a year ago, we shed X now", it's rebranded as "we reduce our workforce thanks to AI" to get possitive press and appeal to the less bright small-time investors.
There's an interesting assumption here that all people working at Cloudflare are great developers, and none deserve to be fired for poor code or laziness.
The future might have more outages then.
I always wonder what happens to institutional knowledge in American companies.
Picture a space station where there's an error when trying to seal the door and they proceed anyway and it explodes from the pressure differential as all the air escapes out to space.
You're expecting the country that's all-in on anti-vaxxing, climate catastrophe denial, and the disassembly of democracy to understand what institutional knowledge is?
Them capital class is all in on those things and owns all the media. But the majority of us are not.
>Both of those are true assuming the lay offs come from different demographics.
That's the point.
Yes, left is right, up is down.
yes sure. its pure accounting and buying into the scam that genai+junior will reduce costs. meanwhile they tokenmaxing vibecoding uis for 50% of their wages cost. I will short every company making those moves.
Surely they wouldn't keep all of the new hires.
I don't think a 17 yrs old company has that many long tenured people!
You're almost defining part of, or the beginning of, the process of enshittification.
Those 11 damn lucky interns!
The 1%!
100x-ing with claude. Code not outcomes, but still!
Serious note you dont really hire interns. They are a contractor (and hopefully apprentice who is looked after) really.
The 0.990099...%
11 interns did okay.
Worst way to grow the company by 11 people
i saw this ALL the time at past employers. Employers higher all kinds of interns who eagerly get truck loads of work done and build great connections. and 2 years later the company is getting sold off, out of business, or mass lay offs all over the place. what's the point of highering all those interns in the first place?? geez.
Interns getting “truck loads” of work done has not been my experience. Potted plant is a better metaphor.
Liquidity in the currency market.
Need to propagate a lot of dollars fast, 24/7 as a moat on it remaining a reserve currency.
99% of these software startups are basic software that can be handled by a single dev; see Reddit apps and such.
But that money printer was running hot and heavy. Needed to funnel it somewhere. Why not that favorite political cudgel of the elites; pointless busy work jobs! Let's invest in a bunch of shops nearby for them to lunch at too!
All of these companies feed their workers in their posh corporate cafeterias while the restaurants around their offices remain mostly empty
Big tech, sure, but not all the startups. I can assure you having freelanced and mentored many a SWE at 5-20 person startups the last 6 years they are not all hiring pro chefs.
Have you not been reading the headlines about urban offices empty? Low taxes to create foot traffic for other businesses?
The trickle down of the ZIRP era was about spreading all the dollars they could print as quickly as possible to maintain dominance of the dollar.
SaaS apps are meaningless to future generations. We were never creating pyramids of Egypt like wonders. We were missionaries for contemporary American propaganda.
> 99% of these software startups are basic software that can be handled by a single dev; see Reddit apps and such.
This sounds like specious reasoning, similar to the tired old interview question "how would you design Twitter".
Twitter is just a table in a RDBMS, isn't it right? Any fool implements that in an afternoon.
Except it isn't, and the actual complexity of real world software often lies in festures you are completely oblivious.
> you are completely oblivious.
Sounds like specious reasoning similar to the tired trope of "someone is wrong on the internet and I must correct them".
Twitter is in the 1% not the "99% of these..." but don't let reading comprehension get in the way.
I was a phonics kid not a 3-cuing student. Reading scores have nose dived since phonics was phased out. So I understand it's not entirely your fault.
>mass lay offs all over the place. what's the point of highering all those interns in the first place?? geez.
If you don't hire them, someone else can hire them. Out of 1,000 you hire, one could be an "attention all you need" research paper writer, who could set up the next stage of innovation which you'll completely miss if you do not get anyone.
Initially, you’ve got to starve out the market of talent to stop competition from growing by nipping the threat in the bud.
Future can pay for all of this if you succeed.
> Out of 1,000 you hire, one could be an "attention all you need" research paper writer, who could set up the next stage of innovation which you'll completely miss if you do not get anyone.
I have worked with people of this caliber. The company did nothing to retain them, and the company did not retain them.
Every time. Without fail.
I am part of Management in my company. We explicitly maintain a list of key people in the company we don’t want to lose. The truth is that just a few people are what makes a company. Lose them and you are in trouble. Some companies don’t seem to understand that, but perhaps after a certain size, it doesn’t matter anymore! The machinery just keeps turning.
Yes. The intent is not to retain them or keep them happy, it's just to prevent them from doing inventive work for anyone else.
I met a guy this happened to. He got a special award within the company, asked for a bit of equity, didn't get it, in fact got blacklisted and booted out.
Luckily for him it worked out very very nicely.
Well how can they have the time or resources to invest in retaining talent? They're busy hiring more interns, where one could be an "attention all you need" research paper writer, who could set up the next stage of innovation which you'll completely miss if you do not get anyone.
Yeah that's a the meme tech bros go with trying to look smurt
But it's pretty clear with the money printer switched off the real motivation was the propagation dollars fast and wide.
The rest of the world has rebuilt after Biden and Trump's and their parents generations bombed it to glass.
Those countries modernizing create an existential threat to the dollar as a reserve currency; fuck Americans! says a generation that grew up in a shit hole Americans left behind.
While polite publicly as expected a whole lot of the 8 billion outside the US do not give a shit the US exists and has power over them.
Turns about they only needed 11 interns.
Wonder if they'll do it like they did for Brittany Pietsch. She recorded her firing video some years ago. I think it's on tiktok but there are youtube videos discussing it as well.
Anyway, new employee at Cloudflare, just finished onboarding. Suddenly a short meeting is scheduled with two people she had never met before. She is told she is let go for "performance" reasons. She kind of tears into them with "what performance issues, I only got great reviews" just to hear the HR people squirm and backpedal, well because, they know they are lying. But of course, they're trained enough to never admit it and say "they'll get back to her on that". Needless to say, it has the same effect as a suspect being arrested arguing with the cops. But it did make Cloudflare "famous" on tiktok for a bit.
I found that video and I couldn't finish watching it. TBH it's really incomprehensible to me why we've created a culture where being so heartless is praised upon.
HR doesn’t squirm because they are lying. They squirm because they minimize lawsuit surface area as much as possible. I have been on the giving end of performance layoffs in big corps and there is an extremely strict script you have to stick to (both HR rep and me as the manager).
I saw the video you’re referring to and it’s completely unsurprising they clam up further when she became confrontational. You’re not gonna talk your way out of a termination unless you have some pretty hard evidence it was for something illegal.
That’s just what getting fired looks like and people don’t often get to see the process so cloudflare “became famous”.
How is obviously lying about the layoff reason minimizing the lawsuit area? It's ripping it wide open I'd think.
Most of the US is a right to work environment where a company can let someone go at any time for any reason other than the few protected class reasons. Many companies also have 90 day probationary period where they bypass internal company processes and let someone go, again other than for protected class reasons.
It's obviously hard when people's lives are upended, but no one complains when companies do a lot of hiring because the risk is lower.
Sure, but why lie?
They lie to get out of paying for unemployment I think.
I mean, look at them it’s a poor struggling company barely making ends meet /s
It starts with some things that minimize the lawsuit area, but over time it transforms into a habit of lying. It's company policy, you know? Don't question, just execute.
Those 11 be Boaz & Jachin of building the Cloudflare's future.
More than enough to vibecode it down.
Didn't know about Yogi Bera's quotes: https://en.wikipedia.org/wiki/Yogi_Berra#%22Yogi-isms%22
Some of these are unintentionally as witty as Mark Twain’s
So they basically fired all the interns? Can anyone who works or knows someone who works for Cloudflare can confirm?
I doubt it. Interns are cheap. They've replaced paid staff with interns!
Quoting from the links you shared:
> Cloudflare aims to hire as many as 1,111 interns over the course of 2026. […] That’s why this significantly increased class of interns will have a special focus: to ramp up the creative and widespread application of AI with a fresh approach.
vs.
> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
lol
Why should a company continually grow in headcount?
Are they taking the piss by hiring and firing the same number as their public DNS IP ?
The "as many as 1,111" number was:
> The number of our intern goal, a nod to our 1.1.1.1 public DNS resolver, is intentional.
But like the sibling comment says, "over 1,100" does not reference any of their resolver IPs anyways. In all likelihood, they hired fewer than the maximum of 1,111 interns and they are probably chopping slightly more than that here (max vs min).
Also it's funnier to make jokes about hiring people, than it is about firing them.
Their main DNS is 1.1.1.1 but their secondary is 1.0.0.1 not 1.1.0.0, so close but not quite.
Opus 4.6 was released between those dates
This and the crazy macro economic environment.
> The number of our intern goal, a nod to our 1.1.1.1 public DNS resolver, is intentional.
Hiring and firing based on things like this should be a huge red flag.
I’m surprised they didn’t lay off 1001.
I realize those were interns, so maybe the expectation is they’re temporary from the start, but picking these numbers for marketing instead of need is silly.
I think this sends a clear message. And the message is this: "Don't work here! You will be f*d! Soon!"
(it also sends clear message to the clients: you will have to suffer through the cheapest to run AI agent in case of troubles, because yes, we care the most about Wall Street guy's income, not anyone else's, we save money on everything else anytime, even when we don't have to)
The skeptical assumption is they need to pay for the AI bills, not that the AI use is actually providing the promises CEOs are making.
The reasonable assumption is they believe a recession is coming.
*a recession did infact come*
Why is this text not rendered as expected.
If you type 2 asterisks it's rendered as one, it's an escape character mechanism:
This text has one asterisk on each side
*This one has two on each side*
I've been told that a recession is coming since 2009, when I started investing - there has never been one since then despite all the dire predictions - therefore, my investments are safe
As the saying goes, "Macroeconomists have successfully predicted nine of the last five recessions."
> there has never been one since then
There was one in 2020, granted it was the shortest on record.
If you had started investing 1 year earlier though?
As long as you didn’t sell, and in fact bought more on the way down, you did well. Of course, not everyone’s time horizon works the timing (you might need the money and so sell at a low point), but generally, being in the market pays off.
The government is very decided on not letting one happen, or hiding any minor recession. They will throw money at the problem as long as they can.
Have to protect boomers retirement accounts at the cost of future generations
Honestly not a bad theory. There’s definitely a huge disparity between actual productivity gained by using agentic coding done somewhat properly… and a non-stop wave of vibe coded work causing outages and churn. Pre-Covid hiring coupled with the high enterprise pricing for AI plans, it would make sense.
If you listen to people on HN you could think AI is not increasing productivity or is even having a net negative effect.
I think the reality is different.
In this thread I saw the resume of an engineer affected by this Cloudflare layoff. In the resume he claimed that adopting opencode in his workflow, he shipped an integration in half the time it took peers without AI assistance for similar projects.
I’m sitting in an airport after spending a week with a client. They’ve killed off one of their enterprise saas subscriptions with an internal ai assisted effort and are looking to kill more. Granted, they are extremely competent but software isn’t their business. There may be something to the saaspocolypse.
I've seen non-tech people building internal tooling that engineering just never had time to get to. Small/lean companies are leveling up with AI, and they aren't carrying the salary overhead of the big companies. The big companies are going to have to get that much more productive in order to compete and/or they are going to have to cut staff.
Shipping is just a milestone. We all know that "AI" can produce code much faster than any human.
Productivity should be measured over time and take into account the cost of maintenance, reliability, amount of issues, etc.
infrastructure changes slowly. once its built its not clear what you are paying 1111 people for.
It is May 2026, there is no difference between AI and non-AI bills.
Most (if not all) major enterprises in the US have gone through at least one round of org-wide subscription renewals (eg: Atlassian product packs, Microsoft product packs, etc) where 1) price increases were mandatory, 2) AI features could not be opted out of, and 3) AI feature usage was strongly encouraged from C-suite to client-facing biz staff to telephone agent support staff.
I repeat, we are passed the point where AI bills and non-AI bills can be differentiated. We are all paying for these features driven by tokens whether we like it or not, whether the cost-benefit analysis makes sense, and whether they are even being used.
And we are all passing the costs onto everyone lower on the totem pole, from insurance groups to bank groups to national grocery chains to consultant conglomerates to minimum wage front-line staff to below-minimum-wage gig workers.
And this is why there are layoffs, every price increase from the top down causes further price increases to cascade down.
About as awkward as "Q1 revenue up 34% YoY". https://www.techmeme.com/260507/p43#a260507p43 https://www.bloomberg.com/news/articles/2026-05-07/cloudflar...
Imagine if they hired those 1111 to do the most massive nine-month-long live coding interview and only 11 pass the bar.
> The packages for departing employees will include the equivalent of their full base pay through the end of 2026. Healthcare coverage is different across the globe, and if you’re in the United States, we’ll continue to provide support through the end of the year. We are also vesting equity for departing team members through August 15th, so they receive stock beyond their departure date. And, if departing team members haven’t hit their one-year cliffs, we are going to waive those and vest their pro-rated equity through August as well.
The announcement reads as pretty heartless to me, but this is a very, very nice departure package
They have a reputation to maintain, otherwise it will be difficult to recruit the best people in future. That being said, damn, that is a very generous package by any measure.
Damn. I got two weeks notice and then got shown the door with nothing. And now I get to compete with all these people who are going to be so much less stressed
> compete with all these people who are going to be so much less stressed
Well many of these folks then would prefer to decompress and chill for a few months instead of hitting the recruitment process early.
I want to agree, however, it will take every bit of that time for some to find new placement. These AI cuts aren't just making it harder to keep a job, but harder to get a job as well.
For better or worse, it isn't a company's job to pay laid off employees until they find a new role.
The industry standard for severance is 1-2 weeks pay per year at the company, paying out roughly 7 months is a big deal (and yes, an acknowledgment of how rough they know the job hunt will be).
Not in tech. Larger severance packages are common.
Going forward, I wonder if severance packages should be a point of competitive recruiting advantage
This isn’t my experience, but I think it depends highly on the segment. We have mainly senior C++ devs (database company), and it’s still a challenge to find great engineers.
I think the current job market isn’t “one size fits all”. Having said that, obviously if they’re getting laid off, they may very well be in the segment that’s less desirable.
Very regional as well, Eastern europe is supposedly doing well, western europe (UK/NL) is doing alright, north america seems significantly worse
I've got a couple of friends that left London to go back to Poland during covid. They first continued to work remotely, but ended up switching to Polish companies because the pay was better.
Yes I think salaries are still a bit lower, but the gap has closed a lot. And cost of living is lower in Poland plus there is some tax break for self employed contractors that means you only pay ~20% tax compared to ~40% in the UK.
With those two factors you could easily end up better off overall, especially if you have kids
The kids factor is even bigger if you move back close to relatives. The ability to drop your children at grandma's instead of paying for childcare is an easy 1k a month you're saving.
I wtedy przynajmniej babcia będzie szczęśliwa pilnować dzieci.
I switched from a Polish company to a German one (both remote), but my pay is more or less the same. The difference is that in Poland to get that money I have to be a "top performer" with a lot of stress and not a lot of time, while in Germany I can be just a mid dev.
Yes Poland in particular is booming. It’s an outsource destination that’s higher skill and less risk than India.
> but harder to get a job as well.
I just tried hiring someone and received over 200 resumes that looked mostly fake. Thinking about adding a final in person interview in an attempt cut down the garbage when I repost.
You should spend a few days thinking about how to improve your process, with more than just a final interview.
I dealt with this exact problem in my last hiring phase too and used this technique to screen them out earlier: https://thomshutt.com/2026/03/24/interviewing-in-the-age-of-...
Use a good recruiter to do the dirty work for you, it’s not cheap but it’s worth the lack of hassle.
With that said, at my firm we switched to using an in-house non-technical HR recruiter using nothing but a LinkedIn Job listing and the results are exactly as you’re experiencing. Perhaps 1 in 100 is a real human with a real resume, the rest are AI being fed our job description to generate a resume.
Onsite final interviews and technical assessments are our stop-gap.
How can humans stand out to companies like yours?
I’ve considered writing informally and putting subtle typos in my cover letters, for example, to signal humanity. Is this a good idea or do recruiters look down on it?
What do you think can be a solution to this? I guess the problem is only going to grow as more people use AI, I'm sure someone out there is also using agentic workflows (basically spamming every job opening). Is the solution to use AI to filter the results or do you think that will not work out if the target is to find the best candidate
Have there been any better tech layoff packages in the last few years?
This is probably the best, wow.
In Europe they’re pretty much obligated to provide this package
Complete fiction. Over covid it was common in big tech layoffs to get much less severance in Europe than US.
Definitely not true in the UK. This is extremely rare for it's generosity. I've never seen anything like this in the UK.
As a general rule USA Tech is much nicer to their employees both when working and during a layoff then Europe.
Depends on the definition of "nice". Is it time or pay?
This one yes, extremely generous, but normal ones aren't.
As always, it depends on the country.
I would be quite surprised if there is one, but if there is I would like to know.
"We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere."
As an English enthusiast, I'm getting very frustrated at how the language is consistently abused in executive communications to write words without saying anything.
The implication that is NOT said is that suddenly 20% of people were sitting around without any work to do because AI was making everyone so efficient and productive. This does not, however, seem to be the reality, based on conversations within the company. It appears we have yet another case of economic downturn disguised as increasing velocity.
I don't read this as employing 20% was twiddling their thumbs and sitting around.
If it means anything beyond economic issues, I read the implication as their LLM expenses have gone threw the roof and with the choice of cutting LLM use or cutting headcount, well we see what mattered more to them.
it's all marketing wank, but how can they "supercharge the value delivered to customers" through company restructuring? whether they hire 50k more people or fire everyone, the value delivered to the customer depends on the quality of the product and the price - irrelevant of cloudflare's margins.
Products will low/negative margins just won't happen or will get killed. But if the margin increases, they might live.
Also with higher margins, more money can be invested in research/experimental products
The price obviously depends on how much salary they have to pay.
No it does not. It depends on what the market is willing to pay.
> 20% of people were sitting around without any work to do
Obviously not directly, because work stretches itself to the time available.
Here, I translated it for you (https://translate.kagi.com/?from=linkedin&to=en_us)
"We’re basically using our own staff as guinea pigs. Our AI usage has spiked 600% lately, mostly because everyone from HR to marketing is leaning on bots to do their actual jobs. We’re forced to restructure the whole company around these agents just to keep up with the hype, hoping it actually helps us ship something useful and justifies the "better internet" PR we keep pushing."
Of course it's a lie. Cloudflare is saying, essentially: "AI is making us so profitable that we've decided to reduce our profit by 20%, to keep it reasonable."
But they’re not profitable? They make 450k per employee revenue, but lose 17k profit. Meanwhile they spend 470 million in stock based compensation for example, up 100 mil from year before, on 5k employees, which they’ve been increasing a lot every year.
They’ve been pumping out products like crazy
They don’t need them. Simple as that
someone has to maintain a he products
More AI?
Good luck with that.
I am confused by this post. No trolling: You wrote "reduce". Did you mean to say/write "increase"? If you layoff people to reduce costs, then your profitability should increase.
by laying people off they increase their profit, at least in the short term (which is all that shareholders care about)
Not with the severance package they're offering, which is why their stock was down between 15-18% after announcing this
You also have to consider nowadays whether a human even wrote most of it, or if is just a tale told by an idiot, full of sound and fury, signifying nothing.
But yes I agree the trigger for layoffs is never massive productivity, the reasons give here are completely bogus and if management actually believe any of it the company deserves to die.
Aka bullshit
Which part of that sentence was confusing? I found it perfectly clear. Their internal AI use is exploding, which is a signal that they need to structure for that, and so they’re laying people off as one of the first steps towards actioning that signal.
Nowhere did they indicate there is less work to do, in fact quite the opposite.
The sentence is not confusing, the sentence doesn't mean anything. There's nothing confusing about it, but there's no information either. "We're making great strides in AI" and "We need to cut 20% of people" are simply two statements without any connection aside from the fact that they are next to each other in the sentence.
> "We're making great strides in AI" and "We need to cut 20% of people" are simply two statements without any connection aside from the fact that they are next to each other in the sentence.
Huh? How is it not connected? More productivity means fewer people are required. I'm not sure how you are not able to connect these obviously connected statements.
Or maybe you don’t understand what it means because you’re not the target audience?
> Their internal AI use is exploding, which is a signal that they need to structure for that, and so they’re laying people off as one of the first steps towards actioning that signal.
I don't see anywhere where the jump from "structuring for AI" directly leads to "laying people off", unless "structuring for AI" means there is less work for people to do, do you?
I think it means - we're spending more money on AI thus we don't have as much to spend on people
This will surely end well
They have been hiring like crazy year after year. Undoing 1 year of hiring is not the end of the world.
Noone knows what the correct structure for this new world looks like. We’ll see what they end up hiring for. But it’s fairly standard to lay off a bunch of people and hire new, rather than retrain, when you need to restructure
Isn’t it funny how the measure is how much AI is used instead of how productivity has evolved?
Not really. This is all so new, noone is using it correctly, because noone knows how to yet. We’re all just kind of flailing our arms around with it, but it’s clearly a force multiplier and its increased use is an actionable signal
I will reply here assuming that you posted with good intent. I think that their PR statement is reasonable from an investor perspective. Try to detach yourself from the personal effects of layoffs. In short, they are saying: Thanks to AI, we don't need as many people to run our business. It is pretty clear to me. Sure, you can be angry about the layoffs, but the economics are clear: AI is increasing profitability faster than the business is growing, so they are using layoffs to reduce costs. Imagine that you have an HR team of five people. If AI has dramatically improved worker efficiency, can you have an equally effective HR team with only four people? That is basically what happened here.
As an investor, it sounds fucking stupid. They aren't dogfooding, they're eating all the dogs' food.
They fired some talented folks. Folks who could be retrained. Folks whose experience snd expertise is valuable. Don't kid yourself.
this is a low quality comment that doesn't address the simple explanation: more productivity means fewer people are required.
That’s what they claim, though.
On its own its just words which might or might not reflect reality. The phrasing strongly indicates its the latter, however
I think GPs point is that this is how they're trying to spin it, but they're not explicitly saying it, and there are doubts whether it's actually true. For outside observers it's difficult to simply ignore all the embarrassing outages that cf has experienced recently and just accept that the company has suddenly solved all their issues by using AI and firing people.
I don't think the mistakes in themselves are damaging. What seems damaging to me is that cf has, on multiple occasions, repeated the same or similar mistakes right after they made major mistakes. This makes it seem like they're not learning from mistakes. Regarding the success of their business model, I can't make a meaningful statement about it, but is that really a convincing argument? If a business is successful, does that automatically mean their product is good?
> AI is increasing profitability faster than the business is growing
I don't understand how this could be the case for Cloudflare specifically. They made their name with DDoS protection and sandboxed hosting. These are exactly the products whose demand rises in lockstep with agent adoption. How could they possibly be allowing all the growth opportunity to slip past them? In times like this, with rising productivity to boot, you increase headcount, not decrease.
Could be they are actually not doing so well and try to cover it up with the usual AI is god excuses, to fool investors.
Thanks to AI, security is more important than ever.
If A1 was real, cloudflare would be 1000% more needed and they would be falling behind with their 600% productivity gainz
I hope this bubble bursts soon. HR people avoiding to do their actual job seems like it is the modus operandi in the majority of businesses these days.
Welp, looks like I’m affected. If anyone is looking to hire a systems engineer with distributed systems and load balancing experience, shoot me an email at <anything>@piperswe.me :/
I’ll update this with a resume link tonight…
Good luck, and if we can help at all, let us know.
Edit: this is a silly longshot, but please see https://news.ycombinator.com/item?id=48057989.
CV link: https://piperswe.me/cv.pdf
pretty minor since the rest are fine but your linkedin link is broken
oh indeed it is! thanks for the heads up!
Firstly, kind sir, layoffs are hard for each and everyone of us and I wish you best as you navigate it. I know you will get many wishes and good lucks though but consider my wishes to be one of many to help ya out.
The who wants to be hired page is still open within Hackernews: https://news.ycombinator.com/item?id=47975570
I recommend if you can share your CV/send a message there, I will try to also keep an eye on it if you do share your CV/resume there and I would love to upvote your comment there to shower some more exposure/love from the community as you are member of hackernews. You are also part of the hackernews community and its the least that I/we can do.
:hug:
I just read your CV and looked at your LinkedIn: https://www.linkedin.com/in/pswe/
Do you have a undergraduate degree? It is unclear from your CV/LI. If not, now is a great time to get one.
When someone has already demonstrated they can do the work, what additional value do you think them getting a degree will bring to a company?
Sometimes the degree is needed in order for the company to be allowed to pay him over a specific amount/scale.
Any company that does this doesn’t seem worth working for
This happened to me once about a handful of years ago, and it happened because in spite of actually getting the job on technical merit, they were a funded NGO who's benefactors demanded at least an undergrad to work in the company. True story, it happens.
Seems like a somewhat traditional suggestion with a potentially massive financial and time commitment. Not that it's not something to do, but why do you think that's the move right now, especially since they're clearly established in their career and nobody cares about it after a few years?
Not the GP, but I think the reason is, that right now it's super hard to get a new job, because of so many things, but mostly, because of AI craze and tanking economies. Bridging that time with a degree is not the worst idea, if you can afford it.
That sucks, and the market is too bleak for empty platitudes.
This just sucks, period.
Take care of yourself until you land something. I'll keep this in mind if anything comes through my grapevine.
Dropped you a email, we have openings for SREs
https://x.com/mgill25/status/2052639259924844894?s=20
I’m curious, what was your AI usage and output like?
Good luck, I'm sure you will find a great role!
You probably have other stuff on your mind right now, thus I can understand if you are not in the mood for answering, but I‘m too curious to not ask:
According to the Reuters article, AI use has increased 6x over only three months. How did that feel from the inside? I’m especially curious because Cloudflare is not a toy company, and this is not about some influencer trying to sell me their latest „this changes everything“ bullshit.
So, shifting a company significantly towards agentic AI, and I assume this isn’t simply about „install Claude Code on every desk“: would you say it actually works? Or would you say it’s still more of a bet, and still needs to prove itself as a sustainable long-term strategy?
Interested as well!
I work at a similar scale company. Like an average person's experience, some things are amazing and super productive with AI and some things aren't. And it's not always the same things all the time.
Sometimes we are able to do a ground up rewrite of a service and squeeze huge efficiency gains out of it all bc AI is helpful in doing so and we have a very good test harness.
Sometimes it makes subtly wrong suggestions that people follow and cause outages.
Sometimes it leads to huge headaches for devs who have to review huge backlogs of code with no idea which parts are serious and which are low effort AI slop.
Sometimes it lets you do a 2 month project in 2 weeks.
good luck and take care of yourself!
Dude, you have the most amazing name ever. Hope you know that.
Goodluck mate
I'm going to start calling these "Canary" moments.
Assuming we take everything at face value for these sorts of cuts, it creates the following scenario:
A company finds itself with surplus labor capacity due to the efficiencies in AI while also posting substantial profit or revenue growth. The company could downsize the workforce to capitalize on short-term efficiencies and increase margins, though this will come at the cost of long-term reputational harm due to posted profits/health as well as burning out staff who must do the same (or increasingly, more) work with less headcount, leading to attrition when the market shifts in their favor. Alternatively, it could leverage this surplus labor for a period of moonshot R&D or paying down technical/process debts while they have the capacity and the profit to pay for it, which harms short-term share price relative to their competitors slashing jobs, while improving the company's capabilities in the marketplace in the long-run, potentially through mastery of these AI tools or the creation of new product lines.
The fact so many orgs opt for immediate greed over long-term growth really is its own canary that leadership and governance both has failed the marshmallow test.
"A company finds itself with surplus labor capacity due to the efficiencies in AI"
That is one possible interpretation, though I don't think it's supported by any facts.
A competing explanation: companies are spending a ton of money on AI in search of efficiency, and then laying people off in order to offset these investments. That's certainly what's been happening at Microsoft, Oracle, Meta, etc.
You can't really compare them to Microsoft, Oracle, or Meta. Those companies aren't cutting costs because AI replaced their own employees. They're pouring money into AI infrastructure and models because they want to sell that capacity to others.
Their thinking is more: instead of funding another internal product team, they can redirect that payroll spend into more AI compute and models they hope to monetize.
I don't believe CloudFlare is doing that, though they might, they could be needing to spend in Edge AI compute and what not, building out that infra isn't free, so they might need to find places the cash will come from.
If you're not in leadership at Big Tech, you're only there for the stock price manipulations.
AI is a fraction of cost of an employee though right? I have an 1000$/mo AI budget which is a fraction of my salary, and most people don’t hit their limits.
Sounds like your company is burning 1000 dollars a month for something people are barely using. At some point those costs become unbearable and they admit that absurd AI budget was a mistake, or they admit no mistake and fire people. I know which they'll choose.
$1000 budget doesn't mean you spend $1000 if you use nothing.
Curious to know why are they not hitting their limits.
In the organization I work, things are crazy at the moment, we are drinking tokens as if we are in hot desert and 1k is barely enough for a week for some people
> A company finds itself with surplus labor capacity due to the efficiencies in AI
It's likely more:
A company finds itself with surplus labor capacity due to the over hiring during Covid, cutting down on risky ventures, protecting margins, and narrowing scope.
But I think there's also:
A company wants to see if AI is making them more efficient, decides to cut people as if it was and see what happens.
I also am not sure about the short term stock price, many recent mass layoffs the stock often moved down. The CloudFlare stock is tanking in after market for example.
I think as someone pointed out earlier, this is more likely about margin preservation as their gross margins are deteriorating really quickly.
Yeah, I wrote this before I dove into their balance sheets for another comment. Cloudflare’s cuts are more defensible than most, but the timing and explanation are shady given that they’ve had the same problems for years.
Excess labor would only translate to increased revenue and new products if these companies had a product vision to begin with. But they don't, so people get sacked.
If using AI had a "substantial profit or revenue growth" wouldn't it make more sense to hire more people so they can use more AI and increase revenue?
If I can pay a person 100k and the result of hiring them is 1mil in my pocket, I am going to do that every day of the week.
The only reason to fire them would be that I think the money will still end up in my pocket without them.
It depends if your market has room to grow. If it’s saturated it’s just about COGS.
If the market had been saturated then there wouldn't have been any (hypothetical) revenue growth which is what the comment above was arguing.
Personally I don't think there was any revenue growth to begin with. They are spending a lot on AI and haven't seen any ROI but for reasons they prefer to fire people and keep investing on AI.
This is simply a symptom that the company doesn't have good Quality Control processes in place.
AI-produced code is good but it's not so good that it can replace hand-crafted (or heavily supervised) code written by the type of engineer who works at Cloudflare.
What's really happening is that a few employees realized they can game the system by turning on a firehose of AI slop and pushing 10x the LOC than any other engineer (with or without AI), because there's no one to tell them to stop, and in fact with a management that actively encourages this.
> What's really happening is that a few employees realized they can game the system by turning on a firehose of AI slop and pushing 10x the LOC than any other engineer (with or without AI)
Did they figure out how to game the system? Or was the system set up exactly with incitaments to produce exactly this outcome?
The new system is immature and hence open to exploitation. This is eventually going to destroy some companies.
> The fact so many orgs opt for immediate greed over long-term growth really is its own canary that leadership and governance both has failed the marshmallow test.
Why do you think it's greed? The company's stock is down and they just missed expectations on their last earnings report (unheard of in big tech in the last 2 years).
It seems more like a traditional layoff scenario
That's the thing. There is no surplus labour capacity, neither they have any ideas for moonshot projects that could pay off left
cloudflare vibecoded a wordpress clone (emdash), they have no idea where to allocate engineers to make new products.
The work is mysterious and important.
This really sucks. I loved this job. I'm an EM and I was trying to hire more people because we're so busy with everything we needed to do. My teams products are something like 95% profit.
Really going to miss my team, they were wonderful to work with. Secretly hoping they'll have to rehire.
I refuse to believe it was about AI. Coming from the inside, the bottleneck was never code. Seeing who is being laid off, especially on my team, it's the people who make things run.
" Secretly hoping they'll have to rehire."
They will just expect a lower wage rate. There's some tacit collusion going on here.. they are using LLMs as a vehicle to address the price that comes with the true shortage of software engineers. You seriously dont think they talk about this behind closed doors? of course they do.
My man, all these fuckers use the same parasitic management consultancies. That's why all this shit looks the same.
Time to watch Office Space again?
Cloudflare has never made a profit.
Is your stance that shareholders should perpetually subsidize it out of the goodness of their hearts?
My stance is this: Fine, maybe you need to restructure for profit reasons. If that is the case, then it is also beholden upon the people doing the layoffs to understand their responsibility in that.
In an ideal world, a layoff of this scale would also require a shakeup of the management that let it get this bad in the first place.
What's more, the higher up the chain, the less onerous the layoff for the individual getting laid off.
Why should people who are profitable to employ be laid off as well?
It just sounds like you're upset and want to hurt whoever you feel is responsible for making you upset. That's not a productive stance to have on important topics.
Absolutely. My hope is selfish - the market is awful
I promise you there are a ton of companies desperate to hire talent right now. It's hard on both sides of the market. Lots of noise, but there is demand for this supply. Unfortunately, that means personal connections are more valuable than they used to be, just to get the ball rolling.
Do the world a favor and take your institutional knowledge out the door to enjoy greener pastures.
The pasture is pretty crowded and full of shit. But thanks, friend. I appreciate it
> Seeing who is being laid off, especially on my team, it's the people who make things run.
How did the company decide who to lay off? They didn't even ask EMs?
Almost 99% sure that They hired a consultant firm (MBB) that told them who to cut; this is pretty standard practice now at public tech corps. Especially if EMs weren’t in the loop. This looks like purely a margin improvement exercise thats hiding weaknesses in the company’s financial performance.
I’m sure they don’t know what they are doing or necessarily care, but I’m still curious what the consultants even claim to be looking at to make the list? Job description, git activity, team level profitability, salary, etc?
They probably claim all of it, but likely only job description.
"You have 20 guys that can code, so you can get rid of two of them".
EMs are never in the loop for layoffs for companies of this size, because the whole company would just get forewarning of the layoffs
This style of layoff seems far more common post-2020 than targeted "restructuring". I've lived through a few layoffs now, survived most of them, but each time and at each company I've gotten by on an apparent roll of the dice and nothing more. Every time I've seen some truly important ICs get let go, their EMs having no input.
I really don't know. My org now has 40+ engineers with 2 managers. Down from 6. I really don't know how they will do it. Each one of us were handling critical shit, and desperately needed more engineers. PMs made things run and they got hit even harder
No one had any idea. My director got the same email
My boss had no idea layoffs were even coming, so who knows how they picked.
Companies have so much data on employees/products/customers etc these days the EM's opinion is just noise.
Please point people you know to https://antithesis.com/company/careers/ which is hiring EMs and deep tech people
> I was trying to hire more people because we're so busy with everything we needed to do
That’s how it was at my previous company also. If you asked any engineer there they’d say “I’m incredibly busy, and I need more headcount to get through the things on my plate”. Then they laid off 40% of the company because AI had made everything so efficient shrug
I guess a company can coast on reputation for a while, before things come crashing down at least at parts of the company.
In my experience, companies never value transparency. And it's doubly true for companies that boast about transparency. Obviously, it's within their authority to cut head count, but they've also obviously made some kind of major strategic shift either to cut costs or abandon some lines of business and they are not being upfront about it at all. The stock is up 111% over 12 months. They don't seem to be in any danger of crashing or collapsing.
> Seeing who is being laid off, especially on my team, it's the people who make things run.
As a Cloudflare customer, that's reassuring! .. not.
I know of 4 teams in Cloudflare One, who lost EMs, PMs and engineers in really critical connectivity systems. Our list of things we need to do is years long. Many of those are needed for reliability and scaling.
They quietly stopped hiring months ago and I figured things were not good. My mistake was thinking my group would be a little safer being profit drivers and big deals...
Is it possible that the line of thinking really is that "agentic AI" will up for the capability shortfall?
It seems to be the stated expectation, but I find it incredulous that management really would believe that?
So Sorry, And I literally just moved all my stuff to cloudflare 2 weeks ago… if it means anything it was a great product.
> Cloudflare expects second-quarter revenue of $664 million to $665 million,
obviously $2.5e9ish/yr is substantial in absolute terms ... but that's it? They intermediate half the internet and only capture $7m/day?
They are in a great position to generate a lot of value without rising prices, they haven't realized it yet because what they have to do is pretty boring.
Businesses tend to choose them because they're cheaper than alternatives.
I think about investing in Cloudflare but that P/E ratio scares me off every time.
They don't have a PE ratio. They have never made a profit.
PE ratio too high!
Sir, that is price/revenue ratio
(jawdrop)
NaN is scary
Their revenue is growing 30% yoy, so investors are speculating it to pay off in the end.
Don’t worry about P/E ratio. If you worry about P/E ratio all the time you would have missed every major tech opportunity for the past decade.
Oh less than Atlassian. Suprised.
Atlassian has a moat of features despite being expensive. You see nibbles by stuff like Monday.com but never big chunks.
CloudFlare is honestly still iterating to find a moat other than 'really cheap'.
High P/E means a good moat.
(Too high and everyone is looking for a start-up to eradicate your product segment of course).
There was an recent article on X with an interesting take - it could be that companies are doing layoffs not because AI is making them more productive but because it hasn't. Their costs have gone up paying for expensive AI but haven't seen any revenue benefits to offset it.
Article https://x.com/championswimmer/status/2051807284691612099
This genuinely wouldn't surprise me, and I need to go back to looking at balance sheets to see if I can sus out the validity of that narrative. As AI subsidization ends prematurely and costs skyrocket, we should expect to see those costs reflected in the operation statements of major customers.
Since I had Coinbase up for review already, I decided to peek there first for any sort of correlation. In 2023, their "Technology and Development" line item shows $1.32bn going out, and by 2025 it'd ballooned to $1.67bn. This is despite headcount actually contracting by almost a thousand people between those two statements, which would normally mean a smaller technology spend since a lot of corporate software is seat-based nowadays. This suggests that yeah, actually AI spend is creating a heavier drag on the balance sheets and it's being offset with layoffs since the "job replacement" narrative is strong. That said, I'd need to check dozens' more balance sheets to draw any sort of industry-wide conclusion.
And to factor in other infrastructure costs that's become more expensive too, such as hosting or hardware. So unless you can isolate AI spending from others that's not going to be convincing.
Ironically an analysis that Codex or Claude Code might be able to perform
Rings true because now teams end up building a lot of things that may or may not have alignment to customer/business needs.
The slow part has always been figuring out exactly what the customer/business actually needs, not the coding. Now teams are throwing money at tokens without solving the "who's buying this?" part appropriately and end up just building excess.
All judgement seems to have gone out the window.
At my last job, within our org, the director had 3 staff engineers building the same, but competing AI tool.
At the last all hands other teams announced their own similar AI engineer productivity tools.
I low-key regret now sticking around long enough to get a layoff package.
I suppose you meant 'not' not 'now' yeah?
yeah, my bad. I typo'd on purpose to prove I'm not AI :P :'(
They are laying people off because the cost of financing have gone up. The risk free rate is now almost 5%. For equity financing you'd need to show revenue growth models that allows repayment at that rate plus equity risk premium (which is quite large for new growth companies).
So the CFO makes a model that allows for this and for sufficient ROI they need less people to be more productive. This mechanically forces them to lay people off.
Of course laying people off might actually not improve productivity, but they need this to have chance.
They're laying off the people who can't produce a minimum of 2x with AI, and keeping the maximalists with no life outside of work barely keeping up with the 100k LOC a week they're shipping to prod.
Suits have an idea of what the New Model Coder should be, and it's not people who don't burn through 100,000,000 tokens a week.
That makes no sense. If that were really true then they could’ve saved a bundle and did that same thing years ago before AI.
The promise of AI gains with fewer people is what's triggering this - before, you needed ~1 coder to do ~1 unit of work. Suits now think you only need 1 coder to do X units of work because LLMs.
So no, they couldn't do the same thing years ago.
I mean, they do (and did). If you aren't shipping, you'll be out eventually.
This is no that far fetched... I don't think it's that common that a customer sits on the fence and says "If only company X had Y on their feature list I'll be a paying customer". So the speed at which the company now runs through its roadmap does not equate to new customers joining.
This links closely with this article i came across: https://readuncut.com/the-social-contract-is-broken/ how basically corporations are pursuing greed at such high levels.
Personally, I think AI is just a convenient scapegoat for these mass layoffs. Also, these kinds of announcements contribute to sustaining the AI hype which all tech investors benefit from. And investors looove hearing about mass layoffs, stock goes up every time without fail.
cloudflare stock went down, genius
investors are not some nefarious monolith cheering for companies to make decisions based on how it benefits The Vibes. they're analysts assessing business decisions.
It went down on poor earnings call. Layoffs were probably an attempt to soften the blow. Hard to tell what was the effect, because the two happened simultaneously
What was bad about the earnings? Every metric I am seeing is beating expectations. Genuinely curious
Most likely poor forward guidance.
This is the simplest and almost certainly correct answer.
I’ve seen this at a number of public companies, and is a reason I hate working for them. These decisions are always unbelievably short sighted and ruin companies in the long term.
Wtf are you talking about? Investors are just gamblers with a fancier title.
They absolutely invest based on vibes.
then why did the riveting stock analysis above mis-predict the market?
Because the market makes no sense. It's just vibes. Trying to make sense of it is a fool's errand.
This is a great article, actually. It does gather many of the empirical data I have seen and felt but were unable to put into word.
I wouldn't argue that it doesn't give any benefits. However, it's not worth the current cost unless you already own RTX PRO 6000 to run any reasonable LLM. I'm using Claude Free and I'm happy with what I get, especially for the cost of $0.
I'm eagerly waiting for the prices to come down so I can upgrade my PC to AM5 and run Gemma 4.
Its quite possible that LLMs become housed units like the next PC. Initially it starts off as being a large thing in data centers (like computers did) until they got smaller and smaller. Except I expect the time it takes to get smaller and smaller to compress much more - given that we live in a world with far more resources and risk-taking.
I mean even this blog from Cloudflare reads a little like that.
this is such a cope take i don't even know what to say. how can people believe in obviously false things like this? like what's the mental model here?
I know it's probably automatic because of the similar titles, but hitting the bottom of the layoff announcement only to be recommended that article about hiring 1,111 interns in 2026 is a reaaal bad look
Kind of makes me wonder if the "more than 1,100 employees globally" actually means "1,111" employees. Talk about committing to the bit
All 4 bits
What is an intern in this context? When I hear "intern" I think of a summer internship. Are there other types for software developers?
Not meaningfully, but sometimes 6mo-1y as part of an undergraduate programme to gain industry experience. E.g. I had 6mo in my third year (not at Cloudflare).
Wow, and I had thought they would be one of the winners in the AI era. A lot of SaaS's can be recreated with an agent and some tokens, but I thought the more infra-y companies would be the beneficiaries. I've vibe coded a few Cloudflare Workers and thought it was a great experience. And Claude knew how to use wrangler to do a lot itself.
layoffs are winning in the short term. investors love them, and if you cut staff but keep revenue that’s profit.
If you were impacted Magnetic (AI Tax Prep for CPA firms) is hiring senior - staff level engineers in SF https://www.ycombinator.com/companies/magnetic
I interviewed at cloudflare in ~2020 and didn’t get the job - everyone I met during the process seemed really smart and kind though. Would love to work with some of those people
Email me subject “cloudflare” if interested - thomas@ our domain (I am the cofounder)
The AI argument doesn't make sense to me for layoffs. If AI is making the company more productive then there's an incredible opportunity to use the existing workforce to tackle the massive backlog of important work. A big layoff only makes sense if there is no more useful work to do or you're killing products.
It's AI but not in the way you think.
AI usage is getting expensive since Anthropic et al are turning the screws, and that money has to come from somewhere. Reducing AI usage is blasphemy of course, so cutting headcount is the only path forward.
Is there no one figuring out ROI on AI spend vs human payroll? I can't make sense of this idea that companies are firing productive employees because they're spending too much money on AI that isn't doing anything for them... they still hope chatbots will be worth it in the future?
> ROI on AI spend
You say that shit like that at the top table and you will be gone within the hour.
The FOMO is real with execs and AI.
It's not that simple.
The marginal gains are inevitably diminishing (since you pick the lucrative options).
There's a practical rate at which work can be done, limited by all sorts of things like organisation friction, how fast customers are willing/able to adopt new features, and how fast you can learn from it.
Arguably AI can improve all of these, but those improvements might not be happening as fast as CloudFlare are able to pump out features.
Further, this is all exacerbated by upper management having to made decisions at the nth derivative. Meanwhile, salary costs you now. You might foresee vast riches in future, but you have to remain solvent and competitive until then.
These all points towards layoffs. There are many factors that point towards keeping employees.
How to decide? No idea. Rightfully no one trusts me to make these!
It's such a bad time to be laid off right now. The competition is ridiculous. I have to compete with like 100k world class employees. Best wishes cloudflare former employees. I hope some of you make new companies and hire other geeks who are on their butts. A lot of us at other companies got the boot with no severance or early stock vestings. It could be worse!
"We are reorganizing for the agentic AI era" reads better than "our gross margin is compressing, our SBC is too high, and our growth is decelerating." Both descriptions could be true; only one gets you a flattering blog post.
My read of this:
Their AI costs have increased 600% but this hasn't translated into actual revenue. Also they are probably projecting AI costs to keep growing. They've done the math and at some point it is going to affect their bottom line.
Reducing or limiting AI usage would be inconceivable given Cloudflare itself has invested on AI and is selling AI services. Instead they've opted for reducing about 20% of their head count.
I don't think so. I think this is a common narrative in Hackernews when layoff news are shared. All the people I talk to in the industry positively confirm a boost in productivity. Its contribution to actual revenue could lag but it is present and confirmed by many.
Which public companies that do NOT sell AI have posted that AI has boosted their revenue?
It has boosted my productivity in my side projects but its nothing I can monetize. Maybe companies have the same problem.
Nah, even insane token costs don't come close to the costs of labor.
Most likely this is just 'AI-washing' - dressing a layoff for economic reasons (such as propping up their shrinking margins) as something more palatable to investors (AI).
I dislike the title because it doesn't clearly state it's a layoff. "Building for the future" gave me the impression that it's about some major new initiative with a roadmap outlining plans.
Yes. We've since changed the top link to a third-party article. We prefer to do this with corporate press releases* - this is probably the #1 exception to HN's "please post the original source" rule (https://news.ycombinator.com/newsguidelines.html). If anyone sees a better third-party article, we can change it again.
(Edit: it's not really an exception because the purpose of a corporate press release is usually to obscure the main story, which means it's misleading, so by HN rules we should change it.)
(Edit 2: I feel like I should add that this isn't specific to Cloudflare! It's literally a generic problem.)
* https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
Thanks for changing this dang, I and all of us really appreciate the work that you do towards hackernews :-D
Have a nice day!
Maybe I've become cynical and jaded, because when I saw the title I immediately thought to myself "oh, Cloudflare's announcing a layoff."
The corporate speak isn't working if people instantly know what it means!
It's like slurs; an ever-moving target.
Even so, "Daddy needs a new yacht" might sound too insensitive.
It's interesting how every time there's a layoff, the blog post always has a title like "Preparing for what's next" or "An update on our workforce" or "Getting ready for the agentic era"!
They should make it “Good news, everyone” like in Futurama.
The title should be something like "Cloudflare reducing workforce by more than 1,100 employees globally".
Yes, and such titles (whose purpose is to not say the thing) fall under "misleading" in https://news.ycombinator.com/newsguidelines.html.
We've changed the title along with the URL - see https://news.ycombinator.com/item?id=48058224.
I’ll never forget how when I was at Google, every email with subject line “An update on X” meant X was getting axed. Like, just say so in the subject line…
It got to the point where people were sarcastically posting "An update on <myself>" when sending goodbye emails.
Two days ago: “Today I've made the difficult decision to reduce the size of Coinbase by ~14%” (layoffs) https://news.ycombinator.com/item?id=48021368
> "Building for the future" gave me the impression that it's about some major new initiative...
If you'll believe them, it indeed is:
They're architecting their company for an agentic future? They're reimaginging the definition of a world-class, high-growth company? They're not resting on the workflows that worked yesterday? blegh
What the hell does any of that actually mean? Like in real life words? Because that much corporate bullshit really sounds like it is a cost-cutting exercise.
This is what the true definition of "AGI" is.
Welcome to the corporate world
It looks like they are using the "agentic AI era" as an excuse to restructure in order to boost margins. GAAP gross margin dropped ~5 points YoY (76% -> 71%)
Gross margin doesn't include r&d and it looks like a bunch of engineering was laid off too
Yikes, so incremental margins are in the 50s. I think this says it all.
Whatever the play here they can’t be angling for any external PR or internal morale boost. What if they wrote: “This is a tough economy and we have to tighten our belts.” Maybe that’s naive of me. Bad signal to investors as opposed to insignificant employees and commoners (PR)?
But contrast with this:
> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
What is this even saying? We use a lot of AI. And not just for other people... for ourselves. This means that: we need to be intentional?
What is a regular, not-investor, person supposed to glean from this? We’ve hit the automation jackpot: some of you will be fired, some of you will get more work for the same pay?[1] Along with shoving your face with euphoric buzzwords “AI era”, “supercharge the value”.
I must surmise that whatever PR and internal morale blow (?) matters so little to them. They are not at all afraid of any backlash from any lowly people.
[1] Again. This paragraph isn’t saying anything beyond that they are using AI and ho-ho things are a-changing. So one has to guess.
Wonder if they used AI to write it. "We don't just [x]. We [y]" strikes again.
Yikes, this sucks.
It is ironic that Cloudflare is letting go 1100 of employees, while roughly 6-7 months ago, they were aiming to hire 1111 interns.
Article: https://blog.cloudflare.com/cloudflare-1111-intern-program/
They're still keeping the interns. Feels very much like a 'replacement'.
"We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere." As an English enthusiast, I'm getting very frustrated at how the language is consistently abused in executive communications to write words without saying anything.
The implication that is NOT said is that suddenly 20% of people were sitting around without any work to do because AI was making everyone so efficient and productive. This does not, however, seem to be the reality, based on conversations within the company. It appears we have yet another case of economic downturn disguised as increasing velocity.
The bottleneck is never code
Building for the future is great!
Except for one small, very tiny, itsy-bitsy problem. We humans are very bad at understand the second and third order effects of events. Really, really bad. First order consequences: "Oh we don't need people anymore".
Do I know the second order effects? Probably not. But at least I know they will be there.
Executive: "Give me a title for the blog post where I'm laying off a bunch of people".
AI: "Building for the Future".
Executive: "Thank you! I knew it was the right decision".
People who lived through 2001 and 2008 crashes, did it look like this or was it even worse than what's happening these days with so many layoffs?
2001 affected tech mainly, so a lot of folks went to other industries still hiring. And 2008 affected other industries more than tech, so the inverse.
I don't remember 2001. But 2008 tech job market was way wayyy better than today.
2008 really wasn't that bad if you were in tech...
No idea about 2001, but I've heard it was fairly rough. More recently I've seen people say now it's harder to find work today, I think in part because in 2001 it was mostly tech companies laying off talent, while corporates who were less impacted by the dot-com bubble were still building out their engineering teams.
The problem with the 2001 dot com bust was that it came on the heels of the telecoms downturn, so the two biggest (at the time) tech sectors were in trouble simultaneously.
Yes, there was still corporate IT - and some areas like finance were positively booming. But for online retail, media, advertising, etc it was a wasteland for 4-5 years. Plenty of people never found a way back into the industry.
To me, it felt much worse then than it does now (though perhaps the USA is being hit much harder at the moment).
2008 did hit tech but, outside of finance, the shock was over much quicker. The effects on the bricks & mortar economy were more obvious, though, so it got covered more in the media.
I agree. It was still ok for most people in tech. Maybe rough for that single year. After that is was nothing but boom times.
I can't speak to 2001.
This feels like something much worse and weirder.
2008 the global economy came somewhere between hours to days of completely crashing if AIG hadn't been bailed out. Other than Covid, it's only the second time in the past 50 years unemployment hit double-digits, the other time being the early 80s recession in the wake of the 1979 energy crisis, which saw inflation go as high as 13.5% and the prime interest rate hit 21.5%. You're probably only concerned about your own industry, but even now, unemployment is still around the lowest it's been since WWII outside of the past couple of years and the late 50s.
It'll be another 40 years hopefully to get a full lifetime of experience and see how I ultimately feel about this, but right now, my sense is software saw a huge boom in the 2010s, a la aerospace in the 60s and finance in the 90s, and it isn't going to die, but that boom was never going to last forever, either. Being a specialist surgeon was always the only true close to guarantee you'll make half a mil annually with supreme job security. Everything else sees booms, busts, regional disparities, and power laws that make it hard to even talk to each other about it because nobody's experience is universal. Even now, in my particular niche of the industry, I don't know anybody who's been laid off. My own company and our competitors are not exactly drowning in cash (I work largely on commission and it's been a terrible quarter), but we're expanding headcount, not reducing.
Conversely, in the 2010s as software boomed and I did terrifically, basically my entire family is in trades and it was totally different for them. Drastic cyclical instability, projects started but then canceled all over the place, injuries, bankruptcies, drug addiction, prison terms. But that's also in California. I live in Texas and construction here seemingly mostly stayed in the boom state. All the tradesmen I know from here rather than family did much better. We also had roughneck as a lucrative fallback option for anyone that didn't mind living in the middle of nowhere thanks to the fracking and shale booms. Computer geeks from 2006 to 2021 or so also had that kind of easy skill transfer fallback thing thanks to the boom in computational data analytics due to advances in data storage and machine learning technologies.
We might even do well to remember that hyperscalers drowning in ad money for the past 20 years had a practice of intentionally overhiring to hoard talent but not give them anything productive to do, putting them into restrictive NDAs and non-competes largely to prevent them from starting their own companies or working for competitors. If that practice is ending, it floods the labor market, driving down wages, and reduces industry-wide employment metrics, but it's not death of the profession so much as ending a market distortion. Maybe it even supercharges entrepreneurialism, but right now we just seem to see a boom in the "solo indie dev" putting out reams of slop. At some point, people have to actually work together and have a real product vision that solves a problem other than using AI to make dev tools to harness AI for making more dev tools.
Isn't the most likely explanation here that they needed to show in their earnings call how their bet on becoming AI infrastructure is leading to high revenue growth expectations, and that isn't happening (yet)?
The stock is currently at -17% in after hours trading.
So you need to do something that's good for your margins to show investors.
> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms.
Anyone else stumbled over that part? That is not at all how I perceive CF.
20% is a crazy number. This is scary, as someone who works in this industry.
Letting go 1,100 people into a bleak job market. Absolutely awful.
It wouldn't shock me if people formerly in tech have changed careers entirely, seemingly every tech-focused company is laying people off in favour of AI.
Clearly if AI were the productivity booster that we're told it is, you'd see hiring into it, not firing. Though I guess on the call Prince did say he expect end '27 to have more employees than for any of '26. Anyway.
I don't think productivity boosters lead to net hiring or firing, but I do think they lead to higher wages.
Bill and Upwork also have announced layoffs today.
https://www.upwork.com/press/releases/upwork-ceo-hayden-brow...
https://www.bill.com/blog/a-message-to-bill-employees-may-20...
Wow, the way Upwork is handling this seems really bad. They announced the layoffs today, but nobody will know who is being let go until next week! Sheesh.
Makes sense to do these things. To realistically make it through this paradigm shift you need to organize into a thing that can exploit it. That inevitably requires eliminating teams that don't fit into the new picture. The severance package seems quite generous. Hope everyone lands on their feet.
It's not that individuals are not useful, or even that their roles are not useful. It's that you have to structure your organization to be able to exploit a coming wave, and existing mechanisms and operations just get in the way. By the time Netflix shut down the DVD business it was making $80 m in revenue and the margins on that business were some 50%. But if you think the writing is on the wall, you're forced to act.
Doesn't mean the people in the DVD-mail-ops sides were bad at what they do. The world had just changed and the business became different.
Cutting salaries to pay the AI costs for the remaining engineers. Going to be rough as this trickles through the entire economy over the next 10 years.
I know this is cold comfort, but in times like this, it can be a good idea to start your own company. Cloudflare itself was founded in the wake of the GFC (post-2008), when tech was dead as a doornail. The best time to start something is when awesome people to work with are unemployed.
I'm sure this is going to happen a lot to big companies, with AI they are all going to find they have too much staff and are not likely to benefit from a higher pace of development. Smaller/Mid size companies on the other hand are likely limited in how much staff they can take on and AI just accelerates their plans (I'm in a company like this).
My response to this, as a generally satisfied CloudFlare customer who was excited to try out agentic email, is that it's not a good time to increase the amount of business I do with them.
Really sorry to see the news about the RIF. My thoughts are with everyone affected.
If you (or someone you know) were impacted and want to stay in the distributed systems or data plane space, we’re doing a lot of work at Kong ($2B valuation API & AI governance company) on high-performance proxies, control planes, and Rust, Golang, etc. (I used to work on Cloudflare's edge proxy project)
Happy to chat about the roles or just the tech stack in general if you want to geek out. Feel free to reach out: datong#konghq.com
Why are they laying off anyone when you got 500 million plus in pure profit. The tax system needs to be reworked to not incentivize layoffs. Major taxes should happen to support the well fair system in order to support people laid off. This is a stupid system we live in.
I don't see how laying people off isn't inherently and always a "cost-cutting exercise." If they had an unlimited budget, they probably wouldn't be laying them off, right?
Maybe it's supposed to mean that it's not... something more specific?
With the hiring 1111 interns thing, I think these companies (amazon as well) need to realize this is doing anything but inspiring confidence in those interns. Instead of being excited about going there, more of them would opt to go elsewhere instead of returning full time, or if they do return full time they'd be in fear of being let go next.
It's interesting to me that this is lower on the HN page than the Cloudflare post talking about the CVE handling even though the scoring is higher.
EDIT: Now it's off the main page, because of course it is.
it's about the comments / votes ratio.
To be more specific, it is a heuristic for detecting flamewars and/or controversial topics and it is quite good at that.
why exactly do we want to damp flamewars by comment count? as long as an individual comment fits the rules why do we punish comments in aggregate
Worst part about the ai era is that so many are convinced they can and need to be on top of it to the extent of losing their core competency while mass producing trash
It’s good stuff but there’s room for a lot of things
Obviously AI is just a excuse
It’s not like this is a factory floor where you process something coming in and AI suddenly makes the process more efficient and people are idle. Every team in tech world has infinite backlog, you don’t fire 20% the minute someone manages to close a few tickets.
> Every team in tech world has infinite backlog
I have non-tech friends who struggle to understand this, because they literally clear their entire backlog of work every single day they're at work.
then they basically don't do knowledge work
why not? isn't the implication of your point that companies should just hire infinitely so long as there's work to be done?
Companies never want to reduce productivity unless they need to cut spending or increase profits. In other words, if AI increases productivity that’s a direct win they can use to beat their competitors. You can’t spend money you don’t have, but you want to spend the money you do have as point at there work to do, which there always is.
> unless they need to cut spending or increase profits
yes, so basically always? the situations where companies don't want to do this are very rare.
I understand your broader point that doubling down on productive things is useful. But there's no limiting principle to that idea.
The obvious reality is that businesses are trying to find a sweet spot between expenses and productivity. It's not always the case that slashing spending is worth it. But it's equally naive to act like being able to do more with less shouldn't make you want... less
The level of group think here is unbelievable. Any opinion other than this is down voted immediately. A whole page of people bargaining and not wanting to face reality.
At my work, our healthcare plan renewed May 1st. We have great insurance. The CEO told us that the healthcare premiums just went up 50% so enjoy this year because it is going to be less great next year.
It doesn't matter how many people have a type of religious faith that this has nothing to do with AI and is all posturing.
The reality is AI is going to get cheaper in the future and I am just going to keep getting more expensive as an employee as we circle the drain in this health care and debt death spiral that everyone is also in complete denial of with no political will to do anything about.
S&P 500 is at an all time high. The real layoffs haven't even started yet.
Yeah, I just don't understand the thinking here on HN anymore. (My account is 15 years old)
It was clear to me even before ChatGPT arrived that software was eventually going to go the same way agriculture went. We will simply need fewer people to do the job than before.
I don't buy that AI will completely automate away all software engineering. I think if you're not in the top ~40% skill wise, you're in serious trouble and have a bleak future.
Many CxO made a decision to spend $$$$ on AI; that's their bet and they're are adamant about it. Money should come from somewhere and layoffs is the easiest way to free some budget in a software company. Was it a good bet only time will tell.
Prince is claiming they laid off very few SWEs, I know at least an entire team of SWEs.
https://x.com/eastdakota/status/2052560831909433554?s=20
The sre team I was hired onto last month, just lost 2 of ~12.
Cynically: our team hired two (me, senior, and a junior) and then we lost two (staff, guy who had been around since the founding, and a senior+ guy)... I kinda assume they baked in some of the layoff decisions into their past quarter or two of hiring to reduce seniority, and salaries, overall. Really short-sighted.
I was still needing to get some 1:1s scheduled with the guy who'd been here for Forever and knew which closets had all the skeletons stashed away. Can't do that now.
Doubt. The eng teams I know lost 15-25% of their SWEs.
Prince is a sociopathic liar
All the AI stuff is just noise to make it sound better - the real issue is the economic downturn.
If anything, AI makes each employee much more valuable because they can be much more productive and most big companies always have stuff that needs doing and opportunities for growth. So it's a sort of Jevons Paradox[1] situation but where human labour is the resource.
When you announce 639m USD revenue for q1 Then lay off a thousand people because you love the smell of your ai farts.
Yes, their revenue was $639m but their expenses were $702m.
It doesn't matter how much revenue you have if you are spending more than that.
Expenses were more on purpose, they amortized a bunch of hardware depreciation now instead of over 5-7 years with the new tax changes. This is pure greed
Are you trolling or just trying to avoid saying they didn't make any money and actually lost over $20 million?
Flippant sarcasm that they're pretending this wasn't a financial decision, and was entirely about being ready for the amazing productivity gains of ai they've already seen, expanding across the business.
Revenue != profit.
Thousand people cost 60m USD of quarterly _profit_ though (not even revenue)
That’s not how accounting works.
Any other engineers just living life frozen at this point. I am unable to make any life decisions because it seems like I won't have a career in the near future. I am unable to purchase a home to settle down for my family, because dad might not have a job next week. I know I am fortunate to have a job, many don't, but fuck if this career isn't the worse thing ever for my overall health and happiness.
Yeah I'm there with you. I got lucky as a kid with delving into this as a hobby and it turned into a professional career. Thought we could change the world for the better, what we made instead was social media cancer and LLMs that can pretend to make everyone 10x more productive. I loathe it.
Yes - I was thinking about starting my own business but am staying put instead and saving as much as possible.
Absolutely. News like this is so hard to ignore. Nervous as hell to drop big money on things the family needs right now. Grateful to have a job, but life overall was just better in almost every sense before AI became part of our daily vocabulary and layoffs occurring every couple of weeks.
I've been out of work since almost a year ago after getting laid off and the same is true for a lot of my coworkers; the job market is absolutely broken in half for a lot of different but related reasons. Thankfully I have significant savings and low costs so I can just coast and do stuff in my own time, but the same hasn't been true for others I know.
Frankly I fully expect people to get even angrier once they become unable to meet the bills and companies still tout the whole AI line.
I find it surprising that the word "incident" doesn't yet show up on this page. Cloudflare had at least two nasty incidents a few months ago. It certainly shook my confidence in the company's ability to run its infrastructure.
That's 2 major layoffs this week (Coinbase being the other). Is there an underlying common reason for this? And is it indeed AI-driven productivity as both companies claim?
There's multiple simultaneous narratives: the industry-wide one of slashing well-paid tech talent under the guise of AI productivity boosts, and what's actually going in at each company.
Cloudflare is an outlier because the company doesn't actually make money at present; their past three annual statements show net losses in the tens to hundreds of millions of dollars. Not hemorrhaging cash per se (their cash reserves alone could cover ~9 more years of losses), but still enough to warrant some cutbacks - and AI is the current scapegoat, thus they finger AI and throw folks out the door.
Coinbase's story is different: they're making good money, but their industry is inherently volatile. Again, recent volatility in the crypto markets related to...things...is dragging down long-term prospects for currencies, while ongoing trades are broadly just insiders doing insider things or exiting their positions for liquidity. Still, their share price is down 27% over 5 years and 18% YTD, so they also need to pump their share price so the executives get paid; layoffs are consistently rewarded by the shareholders, thus they axe part of their workforce for the bump and fingerpoint to AI.
Never take what a company says at face value, and always check their balance sheets. What Cloudflare did sucks but could be warranted to some degree; what Coinbase did has no justification whatsoever beyond naked greed.
> Cloudflare is an outlier because the company doesn't actually make money at present; their past three annual statements show net losses in the tens to hundreds of millions of dollars.
Their free cashflow is high; they're choosing not to report a profit. I don't think it's useful/accurate to say they don't make money.
Don't get me wrong, they may be doing a layoff to boost margins or enter GAAP profitability but the company revenue exceeds its operating cost by quite a bit.
See in their latest quarterly report: https://cloudflare.net/news/news-details/2026/Cloudflare-Ann...
> First quarter revenue totaled $639.8 million, representing an increase of 34% year-over-year
So they're growing 34% annually.
> Free cash flow was $84.1 million, or 13% of revenue, compared to $52.9 million, or 11% of revenue, in the first quarter of 2025. Cash, cash equivalents, and available-for-sale securities were $4,163.9 million as of March 31, 2026.
...and they have $84 million free cash flow in one quarter, and it's consistently pretty good cashflow.
And they have $4b of cash or cash equivalents stockpiled. It seems pretty healthy to me.
Its quite filthy but it benefits them all to lay off lots of people to reset the wage rate in the market... Im sure we will see a wave of re-hiring when this stuff starts to blow over but many initially will be at a much lower wage rate.
Employees cost money. The ZIRP free-money era has ended. Companies have been laying off tech people for the last few years.
Also the US economy is collapsing, that probably has some relevance.
You couldn't tell this by looking at the stock market.
Stock market is up only because investors bet on AI, if you'll exclude AI and AI supply chain at best it would be stagnant.
To me, it just means a dollar doesn't buy as much of IBM as it used to.
Which is the point. There's been a concerted effort by the government to make this the story.
Layoffs and cost of living problems but you must discount the evidence of your eyes and ears and remember it's over 50,000!
The PE ratio of Tesla should tell you everything you need to know about the stock market representing actual economic conditions.
Zirp ended over 4 years ago, what are you talking about, the us economy is collapsing? What? Care to elaborate on any of this?
Whenever someone brings up ZIRP, especially someone with a username like yours, it's an indicator that they have no clue what they are talking about and like to regurgitate things they read on the internet.
> Also the US economy is collapsing, that probably has some relevance.
Right...wait, what?
>especially someone with a username like yours,
> -- blingbot9 2026
a new level of ad hominem
Coinbase lost 40% transaction revenue. The AI thing is just smokescreen
https://finance.yahoo.com/markets/crypto/articles/coinbase-s...
AI productivity is a lie. It’s AI spending because the revenue hasn’t gone up.
I think there's also a certain permission structure that once one sufficiently large org does a big round of layoffs and doesn't get punished, a bunch of others will run the same playbook. We've seen this before -- back in 2022 when Elon fired like half or more of Twitter and the service didn't immediately implode, it gave other CEOs permission to do massive layoffs in the guise of "efficiency" even though the real reason was ZIRP was over. Now they're claiming it's because of AI when it's really that their margins are eroding because the overall economy is slumping and they need to offset AI spend.
Is Coinbase that major though? they're always doing lay-offs.
Meta's layoff was also last week, much bigger than both.
Coinbase for sure is driven by declining Bitcoin fundamentals and entry of other big players in the Trump inner circle. The AI narrative is a lie.
Cloudflare was overvalued and missed extreme expectations (down another 12% now).
By this time I wonder which investor still believes the AI excuse.
TBH I'm surprised people don't see the obvious result of this collective madness:
1. Force every engineer to use agentic AI to the max.
2. Constant anxiety at work due to the threat of job loss and unreasonable expectations from management/business.
3. Engineers start yoloing everything using AI while wasting tokens.
4. Speed goes up in the short term, while quality and expertise degrade little by little, all while bleeding money due to AI usage.
5. One year down the line you have a company full of engineers that don't care and a bunch of slop-bloated, bug-ridden products that the customers don't want, and a massive bill.
IDGI. How is a company that owns a bunch of infrastructure you almost have to use to put your service on the internet not more profitable such that they have to do layoffs?
Unlike the other hyperscalers, they don't attempt to wring every last dollar from their customers' wallets.
> Matthew has personally sent out every offer letter we've extended. It is a practice he has always looked forward to because it represented our growth and the incredible talent joining our mission
Who gives a shit if you treat your staff like this?
I will add cloudflare to the list of companies that I’ll never work for. Shame, because it seemed like an interesting place
I fucking loathe Matthew Prince. Huge piece of shit
I've been slowly moving all of my stuff over to Cloudflare. This certainly does not inspire confidence to continue down that path.
Wow, can't say I saw this one coming. Cloudflare has been putting out a lot of strong work lately. What percentage of their workforce is this?
20%
That's massive
Oof. I guess cloudflare is also gonna have an uptime monitor like Claude now.
Companies like cloudflare operate at a very critical spot as of today. They manage the end points where TLS terminates for most of the internet traffic which means that they have access to all the information flowing through them in clear. When a company is so much motivated by the profits then it would not be too far away when they start selling all this information. With this much centralized control, they can easily turn to abusers instead of being internet gatekeepers for profit. Firing so many people is bound to disrupt the operations, the only question is how much can they can hide/manage.
> When a company is so much motivated by the profits
That is what a company is for.
I think this is the reason why the detailed definition of companies varies, the motivation and regulation on a company varies too. Absent the regulations, financial institutions would have run off with the money by now
Screw Cloudflare. I went through a bizarre 3+ months hiring process where I would have a disconnected, vague 30 minute interview with someone every couple weeks. Then, suddenly rejected for no real reason given.
Their hiring process is remarkably bad for a company that otherwise is so well run. My most recent experience was them throwing a workday link at me to fill something out before we even had the initial phone screen and the forms/ui was so poorly designed that I stopped responding to them.
Sure, but at least agents can now buy domains!
They want to polish upcoming employees into getting more used to AI tools usage but they don't want keep burning cash on experienced ones. They have to establish more YOY growth. Looks like everybody has to justify in the market why they need AI agents more than employees.
first slowly, then all at once.
Why does "the future" in corporate announcements always mean layoffs?
The message to every Cloudflare employee is clear: you'll be there for the company when times are hard. But the company will not be there for you when times are hard.
It does not matter if the way we work has changed, or AI adoption has increased, or aliens show up. This is a demonstrated lack of loyalty that would result in immediate termination of the situation were reversed.
The important take away for everyone else is do you trust Matthew Prince to always take the high road and do what is right, combined with the fact that they man-in-the-middle all of your websites encrypted traffic? What happens when revenues are down and the shareholders demand blood again?
This is literally every public company you just described. Companies do not have loyalty to their employees.
You only have to be there for the company in that you do work for them and they give you money in return. Any tech guys working for them will have received plenty of money. I feel sorry for the non-tech people though (HR, recruiters, etc.).
This announcement is bullshit though. Banging on about transparency and then not even trying to give a reason. They didn't even try to say it's because of AI! They just say "AI is important. We're laying off 1000 people." Wtf.
Thats a solid package tbh
Yes I am jealous. I'm on unemployment paying out of pocket for health insurance and my unvested stocks disappeared.
Some of this is probably from all the companies they've acquihired, rather than genuine AI improvements.
For example, you probably don't need the extra finance person from the start-up you brought on.
Surprised that this isn't part of a "journey"…
Getting laid off in this job market is absolutely terrifying.
Hope everyone affected land on their feet.
Can the disgruntled ex-employees contribute to the Puppeteer Stealth plugin? ;)
Discussion thread on /r/Cloudflare: https://www.reddit.com/r/CloudFlare/s/47qJtr2yEx
> Cloudflare’s usage of AI has increased by more than 600% in the last three months alone.
So did your outages...
https://blog.cloudflare.com/building-for-the-future/
titling "Building for the Future" the announcement of a mass lay-off is disgusting and makes me sick to be honest
is this really the future we want to build?
The future, for those who have the capital. The rest may die, shareholders don't care.
Then we must build our own future. One where we deny the capitalists access to their own automated killer robot armies.
>Then we must build our own future.
Sure. How many of those hated capitalists have started with exactly same thought?
People should stop drop this naive act.
I don’t think I’m the naive one if you think those “hated capitalists” had the intention of building a bright future for the collective us.
The day I switched to cloudflare for my domains... one of the best days in my life.
Interestingly NET is down 15%-ish in extended hours trading and was even down 20% at some point. Many times a stock will make a positive move when layoffs are announced.
Cloudflare is a growing company by most metrics so if efficiencies through AI were the reason for the layoffs they'd just take the boost and grow even faster.
It all doesn't check out and I think the real reason for the layoffs and the negative sentiment by the market on the news is that their revenue growth was not as fast as their expenses and they realized they overhired. Leadership doesn't want to dive too much into the red even if it would mean bigger growth down the line. They are now beholden to the near and mid term stock performance.
I've had the chance to talk to some SWEs working at Cloudflare off the record in recent months and the one concensus I heard was that there was many times some tension between the boots on the ground and the decisions from senior managment but of course nothing they could do and especially after this they'll make sure to be quiet should they remain. There seemed to be a lot of pressure to deliver features and new products but quality has been left behind which means the SWEs felt pressure to deliver while also having to deal with the ensuing issues to resolve.
Either way I wish everyone affected the best and a speedy job hunt - there'll be quite a few really good people on the market now for no fault of their own.
well at least they're getting some decent severance, still sucks, especially in this market.
They should have fired 11 people more and match their public DNS resolver 1.1.1.1
you can earn and spent but you'll never get enough here too i live in msk, russia and working full time job and yes,married have children
My 100% completely personal opinion.
It is not that AI is the contributing factor.
Cloudflare is transforming into yet another surveillance company.
I always see this "Cloudflare ensures you are not a bot" soon may change to "Cloudflare ensures you have a digital ID"
They will not need so many people for this and there will not exist competition to bring better products when people are fired massively and are crippled by financial problems.
AI for me is an excuse. Not the main issue.
It is a strategic transformation to ensure dominant position by killing off competition. Afterall employees are always viewed as threat.
They make it quite clear that these layoffs are in response to adapting to using AI at the company:
> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
The rest is hand-wringing about the emotional weight of the decision and what employees can expect from the process.
What remains to be seen is whether relying so heavily on AI will have similar outcomes to what we've seen from Microsoft and others. Which is to say, is now the time to stop using Cloudflare?
"AI will not replace you, it will just supercharge your existing capabilities."
"lol jk it will totally replace you, bye"
What the hell!? Cloudflare is absolutely killing it and now they're laying people off! I know some good people there with deep expertise and I hope they're not affected.
I would think cloudflare would benefit from all the vibe-coded apps as it is an easy target to deploy these on.
Shameless title.
I’m finding this a little difficult to square. If things are radically changing within the company and they’re rearchitecting how the company works, wouldn’t they start with a transition period? Letting 1k people go, many of whom will be important parts of the organization, while simultaneously making radical changes in light of a radical rate of change over the last few months, seems very high risk.
Taking everything at face value, does anyone have thoughts on why this change makes sense now vs. in 6 months? Are they ripping the bandaid off or… due to the size of the org?
I suspect that companies anticipate that AI prices are going to go way, way up, and they're going all-in on the current "cheap" credits before then.
Did they find the vibecoding secret sauce?
I interviewed there over a month ago and they ghosted me after 3 good rounds. I dodged a bullet it seems.
I interviewed, they didn't want to allow remote, requiring me to immovable move to Dallas. The rest of the team was in 5 other cities.
I'd have to move to sit in an office to jump on a Zoom.
...
Saving Cost for the Future.
Is the job market bad?
Why is Matthew Prince not fired? They missed EPS and AI could write (or perhaps did write) this entirely meaningless announcement.
What they'll do instead is double down and start another 100 useless AI initiatives that no one wants.
Someone who knows the product deeply and has grown it into what it is today will always stay valuable.
AI can replace people at a low level because they are seen as a cost. While people at the top are better connected.
CEOs travel a lot, probably subscribing to 100 mastermind groups where CEOs of other companies also hang out, playing dozens of mind games and strategising all the time.
Such people are hard to replace. The average employee's role is finite, and they aren't taking much risk; therefore, it's trivial to get rid of them.
They also reported Q1 revenue up 34% YoY. https://www.techmeme.com/260507/p43 https://www.bloomberg.com/news/articles/2026-05-07/cloudflar...
A message devoid of any meaning. Like wtf does agentic era prep mean? Is their AI spend too high? Are they not profitable?
Also just once, I wish one of these CEOs would give themselves a slap on the wrist and take a pay cut
Cloudflare's stock price has been disconnected from reality for a while.. the only one that's wilder is Palantir which at least has revenue growth numbers that are very impressive.. meanwhile Cloudflare's enterprise value vs next 12 months revenue and revenue growth just don't justify this completely out of whack market valuation. I feel bad that the company has to try and sustainably justify that. It's incredible to watch the velocity of their launches. But I suppose the reality is most of them are just not selling
I'm not sure why they think I have the time to read all of that.
Who are you?
The hollowing out of another iconic American brand begins.
> Cloudflare’s usage of AI has increased by more than 600% in the last three months alone.
It seems only costs increased. If productivity had increased along with the AI costs they wouldn't need to layoff.
Of couse, this is all bullshit. Making a vague gesture at AI makes it sound like the layoffs are positive.
Truth is this is simply cost cutting. Either due to overhiring in the past, or bracing for the likely economic downturn.
>It seems only costs increased. If productivity had increased along with the AI costs they wouldn't need to layoff.
Thing is average employee skill level is low. And entirely replaced by something like GPT 5.5
People have egos and people have "phases" in life. A 10x person isn't productive for all years of their life.
They've periods of high performance, periods of low performance, depression, etc.
Above all, communication overhead is the biggest bottleneck in product development and information withholding and asymmetry.
This makes AI far better because it can simply write all its findings to a file, which you can revisit later.
You are moron who has never produced anything of value in his life.
in a ten 10 years like this ai enthsiasts crowd the world, we'd be getting starving cuase nobody wants to grow plants and be farmers. only chemical food and dirty water that's ai advantage
corporation ai monsters now will be brainwashing you and we'll be under control of ai .... that's a pity end of humanbeings but with greedy governments and bankers, only way we can aford now is to live somewhere at the end of the world in Nebraska build a barn and never go to big cities. all i want for my children is pure air and water but this fecking boots on the ground like us army marching in ukraine and nato shaking nuclear weapons around my home.
https://polymarket.com/event/another-critical-cloudflare-inc...
Cloudflare has achieved "AGI" internally.
> That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
What a load of crap..
"I have decided to sacrifice some of you for shareholder value, but that is something I am willing to do"
disappointing
hey now i am from msk,russia and i work as an aenginner, married
Anything to not affect your bottomline, Matthew Prince.
Major scumbag. Get fucked.
So you suggest they give out free money to people they don't need?
If you believe it negatively impacts Cloudflare, feel free to start a competing company and hire all those; it's free market after all, anyone can raise money if you can show there is any point in your vision.
What's funny is software guys have forever automated jobs of others. Remember? Automating e-commerce logistics? Automating taxis? Automating vacuuming of floor?
But when their own job is in danger, "think of employees" comes into consideration?
Feel free to start an Indian company. But you don't do that. You come to the West like Nadella and Pichai and take away the jobs in Western companies, genius.
And in the case of Nadella, ruin said companies.
You did same with native americans and do you remember East India company?
Yes I remember the British in India. They were rightfully kicked out. Is the point of mentioning this that you want Indians to be kicked out of the West?
Correct. The laid off staff can now build a startup with the skills they have learned at Cloudflare and compete.
AI exists now and there are no more excuses for them.
it heard like AIC album 1995, hey now i'm chatting here from Moscow.. Jesus save our world! we're tide of politics and 21 centures. slow down smoke more stuff
20% of the workforce is currently being utilised for testing purposes by various companies. (just like we deploy Canary to 10% traffic for test)
In reality, approximately 5-10% of the workforce is equipped with AI technology and can now autonomously manage the entire company.
I am pretty sure CEOs can already see it! Companies create a great deal about the revenue per employee.
Downvoting my statement will not alter the situation, Claude and GPT-5.5 have the potential to replace most system administrators, DevOps engineers, copywriters, support personnel, and other roles.
I have observed this phenomenon in private product companies in India, where I serve as a consultant to multiple companies. I have noticed that 5-10% of the workforce is sufficient to ensure the continued performance of products, with reduced communication overhead, faster updates, and improved reliability.
I also have several side projects that encompass a wide range of responsibilities, so I am not merely a passive executive role.
In India, it has become increasingly challenging to secure jobs in the DevOps, system administration, and frontend domains.
In my opinion, a backend engineer’s job is the most difficult to replace at present, particularly if that engineer possesses a deep understanding of market and product dynamics.