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.
> 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.
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.
>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.
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!
>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.
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”.
> 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.
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.
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.
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.
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 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.
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.
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?
"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.
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.
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.
> 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 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.
"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."
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.
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.
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.
> 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'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.
> 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.
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?
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.
> 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
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.
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.
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
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...
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'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.
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.
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).
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.
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.
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!
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?
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)
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'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!
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.
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.
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.
"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'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).
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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 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?
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.
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?
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.
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.
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.
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.
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.
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?
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
> 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.
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
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.
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.
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Being old doesn't always mean "dead weight". They are dropping experienced people, so from where are young people are going to get experience?
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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.
Mmmm, fresh people.
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Isn’t this illegal?
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>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.
The future might have more outages then.
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.
there's no way 1100 interns are all going to be offered full time jobs
Surely they wouldn't keep all of the new hires.
>Both of those are true assuming the lay offs come from different demographics.
That's the point.
You're almost defining part of, or the beginning of, the process of enshittification.
I don't think a 17 yrs old company has that many long tenured people!
Those 11 damn lucky interns!
The 1%!
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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
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.
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!
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>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.
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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”.
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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).
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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.
> 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.
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.
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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.
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.
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.
Imagine if they hired those 1111 to do the most massive nine-month-long live coding interview and only 11 pass the bar.
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...
> 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.
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.
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> 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.
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.
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As always, it depends on the country.
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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
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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.
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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.
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!
Good luck, I'm sure you will find a great role!
good luck and take care of yourself!
Dude, you have the most amazing name ever. Hope you know that.
Goodluck mate
"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.
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.
The price obviously depends on how much salary they have to pay.
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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.
> 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 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.
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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
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."
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.
> 20% of people were sitting around without any work to do
Obviously not directly, because work stretches itself to the time available.
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.
They’ve been pumping out products like crazy
They don’t need them. Simple as that
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by laying people off they increase their profit, at least in the short term (which is all that shareholders care about)
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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.
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> 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?
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Isn’t it funny how the measure is how much AI is used instead of how productivity has evolved?
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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.
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> 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.
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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?
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.
> 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
" 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.
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Absolutely. My hope is selfish - the market is awful
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> 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.
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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.
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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...
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> 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?
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.
Their revenue is growing 30% yoy, so investors are speculating it to pay off in the end.
They don't have a PE ratio. They have never made a profit.
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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.
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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.
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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.
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.
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.
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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.
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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?
The day I switched to cloudflare for my domains... one of the best days in my life.
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).
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.
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 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 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?
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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)
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.
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!
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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"!
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/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'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!
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'.
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.
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.
"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
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).
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".
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.
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.
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.
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
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.
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.
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.
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.
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.
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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
Doubt. The eng teams I know lost 15-25% of their SWEs.
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.
Prince is a sociopathic liar
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.
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why not? isn't the implication of your point that companies should just hire infinitely so long as there's work to be done?
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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 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?
I've been slowly moving all of my stuff over to Cloudflare. This certainly does not inspire confidence to continue down that path.
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.
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Coinbase lost 40% transaction revenue. The AI thing is just smokescreen
https://finance.yahoo.com/markets/crypto/articles/coinbase-s...
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.
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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?
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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.
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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.
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.
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.
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.
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
Surprised that this isn't part of a "journey"…
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
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.
Why does "the future" in corporate announcements always mean layoffs?
Can the disgruntled ex-employees contribute to the Puppeteer Stealth plugin? ;)
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.
Getting laid off in this job market is absolutely terrifying.
Hope everyone affected land on their feet.
Discussion thread on /r/Cloudflare: https://www.reddit.com/r/CloudFlare/s/47qJtr2yEx
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
"AI will not replace you, it will just supercharge your existing capabilities."
"lol jk it will totally replace you, bye"
They should have fired 11 people more and match their public DNS resolver 1.1.1.1
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.
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.
> Cloudflare’s usage of AI has increased by more than 600% in the last three months alone.
So did your outages...
I would think cloudflare would benefit from all the vibe-coded apps as it is an easy target to deploy these on.
well at least they're getting some decent severance, still sucks, especially in this market.
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?
Shameless title.
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.
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?
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?
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
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.
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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
Didn’t they just recently say they were hiring a huge number of interns because of AI?
The interns are training their replacements. Efficient.
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.
https://polymarket.com/event/another-critical-cloudflare-inc...
Cloudflare has achieved "AGI" internally.
hey now i am from msk,russia and i work as an aenginner, married
> 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
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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.
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.
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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.