Earlier quoted context omitted.
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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Cloudflare to cut about 20% of its workforce
151–160 of 1001 posts
Re: Cloudflare to cut about 20% of its workforce
#152Didn’t they just recently say they were hiring a huge number of interns because of AI?
The interns are training their replacements. Efficient.
Re: Cloudflare to cut about 20% of its workforce
#153There 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 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.
Re: Cloudflare to cut about 20% of its workforce
#154Welp, 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 @piperswe.me :/ I’ll update this with a resume link tonight…
good luck and take care of yourself!
Re: Cloudflare to cut about 20% of its workforce
#155I'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…
cloudflare vibecoded a wordpress clone (emdash), they have no idea where to allocate engineers to make new products.
The work is mysterious and important.
Re: Cloudflare to cut about 20% of its workforce
#156My 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 h…
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.
Re: Cloudflare to cut about 20% of its workforce
#157I'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…
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?
It depends if your market has room to grow. If it’s saturated it’s just about COGS.
Re: Cloudflare to cut about 20% of its workforce
#158That'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…
> 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.
Re: Cloudflare to cut about 20% of its workforce
#159This 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, especi…
> 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?
Re: Cloudflare to cut about 20% of its workforce
#160I 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?