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

> Like you, we have seen numerous reports that more and more firms are capping their total headcount in favor of leaning on more AI tools, leading to downsizing their intern and new-graduate hiring. This is resulting in increased sidelining of new college graduates. But we think this misreads the moment completely, so we’re heading in the opposite direction.

> While we are excited about what AI tools can help do, we have a different philosophy about their role. AI tools make great team members even better, and allow firms to set more ambitious goals. They are not replacements for new hires — but ways to multiply how new hires can contribute to a team.

A lot of people here and in the industry in general seem to optimise for compensation package and put blinkers on themselves for other factors that are definitely relevant.

Companies aren't penalised by candidates for such practices. I'm not saying it's good but it's astounding to me the number of people who for example optimise entirely for salary and then are shocked when the working conditions are very poor.

People game companies and companies will game people in return. Murray Gell Man amnesia will kick in and next week there will be thread about how CloudFlare is a great place to work for software devs because you can earn 20% more than other comparable companies with no reference to how things like job security or working conditions are measured.

You now know which companies do this.

Every company laying off now has to wear a Scarlett Letter: "we're a layoffs company".

Either they will answer directly with something solid like "We're growing the team" or they will evade it which is still a meaningful answer for you. You could probe further with questions like:

"How has the team's headcount changed over the last 18-24 months?"

Basically you're alluding to 'employee turnover' without saying it.

LLM models have better reasoning abilities than these folks....

If that's the rule in your organization, and you have a core group of people that actually know the systems and get the work done, you better make sure you have 10% padding every year, lest you layoff someone important and their friends all quit in disgust. And since competence and institutional knowledge is built over time, that implies a revolving door of new folks coming in and most of it not making it.

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"

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.

If they actually miss it they can call it back to work for triple the going rate.

They usually don't though. Those left behind have to figure it out again with whatever new tools they have at their disposal, thus continuing the great circle of corporate life.

Or corporate death if they don't figure it out in time and it is actually important. But even then, the management won't miss anything.

https://techtrenches.dev/p/the-west-forgot-how-to-make-thing...

(Has some AI tells though, probably AI-assisted?)

Anyway in general, corporations are sticky. They save resources through scale and collaboration. Famously this is a problem for free market true believers because if you believe that the market is the most efficient mean of organizing people then you would expect firms to operate internally as free markets (or disappear). There is a whole body of work about it,

https://en.wikipedia.org/wiki/Theory_of_the_firm

In practice you can't just become your own boss and compete against firms.

A lot of market forces tend to "naturally" create monopolies/oligopolies. For eg if you're the biggest steel plant you can operate efficiently and keep moderate margins, beating any plants not as big (economies of scale). An independent guy (or even the entire team) can't just open a new steel plant shop down the road, even if the current one sucks.

To be a bit honest, I'm a computational scientist who's never seen anything near 100K and likely never will. It's hard to imagine not having around 4 times my salary and not being able to start something myself.

I think your premise is significantly correct; things like launch HN (and even YC startups) are heavily software biased. I suspect you'll find about a hundred product hunt products for every physical kickstarter/indiegogo.

Even if you are good at those, for many companies, it's more about connections than about the ability to build stuff. So if you don't know the right people, it is very difficult to get a foothold.

Given I'm now in my mid-50s, things are looking grim. And I'm not getting paid SV silly money. I'm not even getting paid US dollers.

The biggest but not only example: https://en.wikipedia.org/wiki/Tom_Mueller (yes, lots of subcontractors involved, however, Nasa paid, with a bonus percentage provided by the US military)

Note that Mueller gives the payment situation at TRW, and the fact that he "wasn't appreciated" as a direct reason to go to SpaceX.

What did you think happened? Does anyone actually believe Musk did the technical design for that engine, just because he claims so? Or I should say he constantly claims it, staying slightly away from direct claims to avoid getting caught in lies (well ... getting caught AGAIN).

That’s great in theory, it rarely works in reality. Those people almost universally find new work quickly because they’re good, or retire because they can.

In both instances the idea of going back to bail out a company that just screwed you, operating with a giant target on your back when the inevitable next layoff occurs, isn’t worth it for 10x the salary. Ignoring the fact a business of any significant size isn’t approving paying someone to come back for 3x, they’ll just caN the manager for the fallout.

Hired as a code monkey, fired as a code monkey.

This is contextual on a number of factors. It seems difficult to establish in the general case.

Give the new people 6 months to benefit from all that institutional knowledge.

LLMs are a great tool, but more often than not it does show if the person using them knows what they're doing or not pretty clearly. Especially if it's anything larger than a trivial small change.

The problem is that "I copied the issue on claude code and then committed the code it produced" is not actually taking ownership.

> noone appreciates the years spent "googling and looking at stackoverflow" anymore, and frankly, they shouldn't be.

Well, I do, and I hard disagree with you there. If the human does not understand what the machine is producing, then I need a different human.

Having said that, and feeling more with you than the other guy, there is nothing for you to "disagree" with.

Mediocre was always buggy and broken in some ways, but for all intents and purposes it was good enough. Today somebody with a year of study can reasonably deploy something - for which the appearance of taking ownership and shipping a full stack of features has reached the bar of good enough.

Consider 10 years ago: Did you believe it was more likely that in the quality-distribution-of-software that we would, over time, create proportionally more quality? I dont think so and AI didn't meaningfully change the trend.

It changed the work dynamics, and still is changing, and with our inability to communicate is going to be an annoying mess.

Dont let the annoyances blind you to what LLMs can do for your point in space, or to where most of the points lie for the rest of the world.

I think we should care that our engineers have put the effort to understand the code they are responsible to produce. I don't care specifically about how they get that knowledge (I am using AI to learn myself, for example). But I disagree with the implicit assumption on the statement, which is, in my view, "humans don't need to understand the code any more" (because some fresh out of university might think they understand, but they really don't).

I can't work with that sort of surprise. I'm tuned to consistency, and I can work with consistently bad, but not with "95% absolutely amazing, 5% abysmal".

And I say this as someone who develops exclusively with LLMs now.

I am using Claude Code with Opus 4.5 and I have to correct it every day. It produces working code but it makes mistakes. The code is more verbose than it should be, misunderstands/ignores edge cases, etc. Daily.

And I am not a stellar world-class programmer. I am pretty average. I just read what it produces.

    > The Age Discrimination in Employment Act (ADEA) forbids age discrimination against people who are age 40 or older.

The only way for this to happen is by leaked private conversations, I think.

I sense a paradox.

https://en.wikipedia.org/wiki/Insider%E2%80%93outsider_theor...

But high economic performance this isn't. Adaptability of market to ever-changing world that certainly isn't neither. Europe is getting hammered by this and things will get much, much worse in upcoming years. We will have to revisit our comfy lazy attitude towards work, or end up being a stagnant place with 3rd world salaries and corresponding QoL.

Switzerland is doing things much better, its sort of in between both extremes and economy is reflecting this very well. But EU leaders egos will sooner accept poverty than that somebody figured out things better than them.

What I hear is that Switzerland is a bad example. Many people there struggle to make a living.

The poverty rate in Switzerland has increased (source:https://www.bfs.admin.ch/bfs/en/home/statistics/economic-soc...) but is defined as:

The poverty line is derived from the guidelines of the Conference for Social Welfare (SKOS). In 2024, it was on average CHF 2388 per month for a single person and CHF 4159 for two adults with two children.

I live in Zurich (by far the most expensive city) and while 2388 (or 4159) would be tight (depending on housing) it would still afford you a fairly comfortable life with access to top quality healthcare and public transport. Life quality wise one could argue that poverty in CH is a better option than a middle income in a lot of European countries.

"In 2024, the total income tax paid by all publicly listed European internet companies combined was approximately €3.2 billion. This total, which includes firms like SAP, Adyen, Spotify, and Zalando, was notably lower than the €3.8 billion in fines the EU collected from US tech giants in the same year"

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.

That's the point.

> Cloudflare aims to hire as many as 1,111 interns over the course of 2026. […] That’s why this significantly increased class of interns will have a special focus: to ramp up the creative and widespread application of AI with a fresh approach.

vs.

> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.

lol

Serious note you dont really hire interns. They are a contractor (and hopefully apprentice who is looked after) really.

(it also sends clear message to the clients: you will have to suffer through the cheapest to run AI agent in case of troubles, because yes, we care the most about Wall Street guy's income, not anyone else's, we save money on everything else anytime, even when we don't have to)

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!

Have you not been reading the headlines about urban offices empty? Low taxes to create foot traffic for other businesses?

The trickle down of the ZIRP era was about spreading all the dollars they could print as quickly as possible to maintain dominance of the dollar.

SaaS apps are meaningless to future generations. We were never creating pyramids of Egypt like wonders. We were missionaries for contemporary American propaganda.

This sounds like specious reasoning, similar to the tired old interview question "how would you design Twitter".

Twitter is just a table in a RDBMS, isn't it right? Any fool implements that in an afternoon.

Except it isn't, and the actual complexity of real world software often lies in festures you are completely oblivious.

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.

I have worked with people of this caliber. The company did nothing to retain them, and the company did not retain them.

Every time. Without fail.

Luckily for him it worked out very very nicely.

But it's pretty clear with the money printer switched off the real motivation was the propagation dollars fast and wide.

The rest of the world has rebuilt after Biden and Trump's and their parents generations bombed it to glass.

Those countries modernizing create an existential threat to the dollar as a reserve currency; fuck Americans! says a generation that grew up in a shit hole Americans left behind.

While polite publicly as expected a whole lot of the 8 billion outside the US do not give a shit the US exists and has power over them.

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 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”.

It's obviously hard when people's lives are upended, but no one complains when companies do a lot of hiring because the risk is lower.

I mean, look at them it’s a poor struggling company barely making ends meet /s

> 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).

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.

This text has one asterisk on each side

*This one has two on each side*

There was one in 2020, granted it was the shortest on record.

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.

Productivity should be measured over time and take into account the cost of maintenance, reliability, amount of issues, etc.

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 announcement reads as pretty heartless to me, but this is a very, very nice departure package

Well many of these folks then would prefer to decompress and chill for a few months instead of hitting the recruitment process early.

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.

With that said, at my firm we switched to using an in-house non-technical HR recruiter using nothing but a LinkedIn Job listing and the results are exactly as you’re experiencing. Perhaps 1 in 100 is a real human with a real resume, the rest are AI being fed our job description to generate a resume.

Onsite final interviews and technical assessments are our stop-gap.

I 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.

With those two factors you could easily end up better off overall, especially if you have kids

This is probably the best, wow.

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.

Also with higher margins, more money can be invested in research/experimental products

Obviously not directly, because work stretches itself to the time available.

"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."

They fired some talented folks. Folks who could be retrained. Folks whose experience snd expertise is valuable. Don't kid yourself.

    > For outside observers it's difficult to simply ignore all the embarrassing outages that cf has experienced recently

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.

If A1 was real, cloudflare would be 1000% more needed and they would be falling behind with their 600% productivity gainz

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.

They don’t need them. Simple as that

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’ll update this with a resume link tonight…

Edit: this is a silly longshot, but please see https://news.ycombinator.com/item?id=48057989.

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:

This just sucks, period.

Take care of yourself until you land something. I'll keep this in mind if anything comes through my grapevine.

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?

Sometimes we are able to do a ground up rewrite of a service and squeeze huge efficiency gains out of it all bc AI is helpful in doing so and we have a very good test harness.

Sometimes it makes subtly wrong suggestions that people follow and cause outages.

Sometimes it leads to huge headaches for devs who have to review huge backlogs of code with no idea which parts are serious and which are low effort AI slop.

Sometimes it lets you do a 2 month project in 2 weeks.

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.

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.

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.

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.

The only reason to fire them would be that I think the money will still end up in my pocket without them.

Personally I don't think there was any revenue growth to begin with. They are spending a lot on AI and haven't seen any ROI but for reasons they prefer to fire people and keep investing on AI.

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.

Did they figure out how to game the system? Or was the system set up exactly with incitaments to produce exactly this outcome?

Why do you think it's greed? The company's stock is down and they just missed expectations on their last earnings report (unheard of in big tech in the last 2 years).

It seems more like a traditional layoff scenario

Really going to miss my team, they were wonderful to work with. Secretly hoping they'll have to rehire.

I refuse to believe it was about AI. Coming from the inside, the bottleneck was never code. Seeing who is being laid off, especially on my team, it's the people who make things run.

They will just expect a lower wage rate. There's some tacit collusion going on here.. they are using LLMs as a vehicle to address the price that comes with the true shortage of software engineers. You seriously dont think they talk about this behind closed doors? of course they do.

Is your stance that shareholders should perpetually subsidize it out of the goodness of their hearts?

In an ideal world, a layoff of this scale would also require a shakeup of the management that let it get this bad in the first place.

What's more, the higher up the chain, the less onerous the layoff for the individual getting laid off.

It just sounds like you're upset and want to hurt whoever you feel is responsible for making you upset. That's not a productive stance to have on important topics.

How did the company decide who to lay off? They didn't even ask EMs?

"You have 20 guys that can code, so you can get rid of two of them".

No one had any idea. My director got the same email

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

As a Cloudflare customer, that's reassuring! .. not.

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...

It seems to be the stated expectation, but I find it incredulous that management really would believe that?

The stock is currently at -17% in after hours trading.

So you need to do something that's good for your margins to show investors.

obviously $2.5e9ish/yr is substantial in absolute terms ... but that's it? They intermediate half the internet and only capture $7m/day?

Sir, that is price/revenue ratio

(jawdrop)

CloudFlare is honestly still iterating to find a moat other than 'really cheap'.

High P/E means a good moat.

(Too high and everyone is looking for a start-up to eradicate your product segment of course).

Article https://x.com/championswimmer/status/2051807284691612099

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.

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 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.

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.

So no, they couldn't do the same thing years ago.

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’ve seen this at a number of public companies, and is a reason I hate working for them. These decisions are always unbelievably short sighted and ruin companies in the long term.

They absolutely invest based on vibes.

I'm eagerly waiting for the prices to come down so I can upgrade my PC to AM5 and run Gemma 4.

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)

Anyone else stumbled over that part? That is not at all how I perceive CF.

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.

You say that shit like that at the top table and you will be gone within the hour.

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!

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.

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).

(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...

Have a nice day!

We've changed the title along with the URL - see https://news.ycombinator.com/item?id=48058224.

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] ...

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.

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.

No idea about 2001, but I've heard it was fairly rough. More recently I've seen people say now it's harder to find work today, I think in part because in 2001 it was mostly tech companies laying off talent, while corporates who were less impacted by the dot-com bubble were still building out their engineering teams.

I can't speak to 2001.

This feels like something much worse and weirder.

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/

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.

AI: "Building for the Future".

Executive: "Thank you! I knew it was the right decision".

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.

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.

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.

https://www.upwork.com/press/releases/upwork-ceo-hayden-brow...

https://www.bill.com/blog/a-message-to-bill-employees-may-20...

If anything, AI makes each employee much more valuable because they can be much more productive and most big companies always have stuff that needs doing and opportunities for growth. So it's a sort of Jevons Paradox[1] situation but where human labour is the resource.

EDIT: Now it's off the main page, because of course it is.

At my work, our healthcare plan renewed May 1st. We have great insurance. The CEO told us that the healthcare premiums just went up 50% so enjoy this year because it is going to be less great next year.

It doesn't matter how many people have a type of religious faith that this has nothing to do with AI and is all posturing.

The reality is AI is going to get cheaper in the future and I am just going to keep getting more expensive as an employee as we circle the drain in this health care and debt death spiral that everyone is also in complete denial of with no political will to do anything about.

S&P 500 is at an all time high. The real layoffs haven't even started yet.

It was clear to me even before ChatGPT arrived that software was eventually going to go the same way agriculture went. We will simply need fewer people to do the job than before.

I don't buy that AI will completely automate away all software engineering. I think if you're not in the top ~40% skill wise, you're in serious trouble and have a bleak future.

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.

yes, so basically always? the situations where companies don't want to do this are very rare.

I understand your broader point that doubling down on productive things is useful. But there's no limiting principle to that idea.

The obvious reality is that businesses are trying to find a sweet spot between expenses and productivity. It's not always the case that slashing spending is worth it. But it's equally naive to act like being able to do more with less shouldn't make you want... less

https://x.com/eastdakota/status/2052560831909433554?s=20

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.

It doesn't matter how much revenue you have if you are spending more than that.

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

Maybe it's supposed to mean that it's not... something more specific?

It’s good stuff but there’s room for a lot of things

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.

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.

Who gives a shit if you treat your staff like this?

I will add cloudflare to the list of companies that I’ll never work for. Shame, because it seemed like an interesting place

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.

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.

Also the US economy is collapsing, that probably has some relevance.

Layoffs and cost of living problems but you must discount the evidence of your eyes and ears and remember it's over 50,000!

The PE ratio of Tesla should tell you everything you need to know about the stock market representing actual economic conditions.

> -- blingbot9 2026

https://finance.yahoo.com/markets/crypto/articles/coinbase-s...

Cloudflare was overvalued and missed extreme expectations (down another 12% now).

By this time I wonder which investor still believes the AI excuse.

For example, you probably don't need the extra finance person from the start-up you brought on.

That is what a company is for.

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 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.

Hope everyone affected land on their feet.

Cloudflare is a growing company by most metrics so if efficiencies through AI were the reason for the layoffs they'd just take the boost and grow even faster.

It all doesn't check out and I think the real reason for the layoffs and the negative sentiment by the market on the news is that their revenue growth was not as fast as their expenses and they realized they overhired. Leadership doesn't want to dive too much into the red even if it would mean bigger growth down the line. They are now beholden to the near and mid term stock performance.

I've had the chance to talk to some SWEs working at Cloudflare off the record in recent months and the one concensus I heard was that there was many times some tension between the boots on the ground and the decisions from senior managment but of course nothing they could do and especially after this they'll make sure to be quiet should they remain. There seemed to be a lot of pressure to deliver features and new products but quality has been left behind which means the SWEs felt pressure to deliver while also having to deal with the ensuing issues to resolve.

So did your outages...

is this really the future we want to build?

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.

> 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?

"lol jk it will totally replace you, bye"

Taking everything at face value, does anyone have thoughts on why this change makes sense now vs. in 6 months? Are they ripping the bandaid off or… due to the size of the org?

I'd have to move to sit in an office to jump on a Zoom.

...

What they'll do instead is double down and start another 100 useless AI initiatives that no one wants.

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.

Also just once, I wish one of these CEOs would give themselves a slap on the wrist and take a pay cut

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.

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.

What a load of crap..

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?

And in the case of Nadella, ruin said companies.

AI exists now and there are no more excuses for them.

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.