Cloudflare to cut about 20% workforce

rohitpaulk

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?

deanputney

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?

piperswe

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…

pcdevils

When you announce 639m USD revenue for q1 Then lay off a thousand people because you love the smell of your ai farts.

prymitive

Obviously AI is just a excuse

alyxya

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.

everfrustrated

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.

fuddle

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%)

ggoo

> 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

nasso_dev

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?

adhamsalama

> Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. So did your outages...

deepriverfish

well at least they're getting some decent severance, still sucks, especially in this market.

opentokix

"I have decided to sacrifice some of you for shareholder value, but that is something I am willing to do"

jwpapi

https://polymarket.com/event/another-critical-cloudflare-inc...

stego-tech

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.

davidcelis

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

sjZqahg

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.

treexs

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.

RSHEPP

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.

zb3

> 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..