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Cloudflare to cut about 20% of its workforce

reuters.com

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Re: Cloudflare to cut about 20% of its workforce

#321

Post by arjie »

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.

Re: Cloudflare to cut about 20% of its workforce

#322

Post by _carbyau_ »

ornornor wrote: post #291
kakadu wrote: post #281

Earlier quoted context omitted.

Making it illegal would be communism

Yes because anything that is good for individuals is communism.

People are feeling more alone than ever. But whatever you do, don't do anything communal!

Re: Cloudflare to cut about 20% of its workforce

#323

Post by DHRicoF »

AloysB wrote: post #135

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 quo…

Imagine if they hired those 1111 to do the most massive nine-month-long live coding interview and only 11 pass the bar.

Re: Cloudflare to cut about 20% of its workforce

#324

Post by didibus »

bananamogul wrote: post #255
stego-tech wrote: post #32

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…

"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.

Re: Cloudflare to cut about 20% of its workforce

#325

Post by fud101 »

itake wrote: post #241
CharlieDigital wrote: post #128

Earlier quoted context omitted.

Rings true because now teams end up building a lot of things that may or may not have alignment to customer/business needs. The slow part has always been figuring out exactly what the customer/business actually needs, not the coding. Now teams are throwing money at tokens without solving the "who's buying this?" part appropriately and end up just building excess. All judgement seems to have gone out the window.

At my last job, within our org, the director had 3 staff engineers building the same, but competing AI tool. At the last all hands other teams announced their own similar AI engineer productivity tools. I low-key regret now sticking around long enough to get a layoff package.

I suppose you meant 'not' not 'now' yeah?

Re: Cloudflare to cut about 20% of its workforce

#326

Post by throwaway2037 »

Snoozle wrote: post #69

"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 cu…

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.

Re: Cloudflare to cut about 20% of its workforce

#327

Post by farfatched »

davidcelis wrote: post #33

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

What is an intern in this context? When I hear "intern" I think of a summer internship. Are there other types for software developers?

Re: Cloudflare to cut about 20% of its workforce

#328

Post by fauchletenerum »

organ1cwast3 wrote: post #263
leaves83829 wrote: post #257

Earlier quoted context omitted.

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 bu…

All of these companies feed their workers in their posh corporate cafeterias while the restaurants around their offices remain mostly empty

Re: Cloudflare to cut about 20% of its workforce

#329

Post by fauchletenerum »

coliveira wrote: post #251
stringfood wrote: post #247

Earlier quoted context omitted.

I've been told that a recession is coming since 2009, when I started investing - there has never been one since then despite all the dire predictions - therefore, my investments are safe

The government is very decided on not letting one happen, or hiding any minor recession. They will throw money at the problem as long as they can.

Have to protect boomers retirement accounts at the cost of future generations
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