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
The announcement reads as pretty heartless to me, but this is a very, very nice departure package
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.
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.
How did the company decide who to lay off? They didn't even ask EMs?
No one had any idea. My director got the same email
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...
I’ll update this with a resume link tonight…
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.
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.
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.
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.
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.
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.
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.
Vague overtones on AI savings without any hard evidence that’s happening, while ignoring obvious evidence that the company over-hired and is now underperforming relative to what would be needed to justify all that headcount.
Nobody believes these narratives at this point and CEOs would garner a lot more respect if they just simply said
“I screwed up, we hired too many people and fell short of performance targets. I own that. This resets us back on track.”
obviously $2.5e9ish/yr is substantial in absolute terms ... but that's it? They intermediate half the internet and only capture $7m/day?
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).
The job market is already brutal for many candidates, especially people who aren’t social media personalities and don’t have names like Cloudflare, Meta, Amazon, or Google on their CVs. Some people will end up homeless...
At least having Cloudflare on their resume will likely help many of these people land new opportunities, so I wouldn’t be too worried about their long-term prospects...
What I don’t fully understand is why a company like Cloudflare decides to let experienced people go under the umbrella of “reorganisation.” Couldn’t some of them be given the opportunity to adapt to new priorities or ways of working?
What exactly is so fundamentally difficult in 2026 that someone with years of experience can’t learn?
Of course, large organisations sometimes develop dysfunctional habits. I’m not saying that’s necessarily the case here, but common examples include:
1. Problems that a motivated engineer could solve in minutes instead turn into meetings scheduled a week later, followed by more meetings.
2. People are becoming so process-oriented or conservative that they reject new approaches by default (Not even trying things out, and I don't mean migrating to a new fancy framework)
3. Engineers losing touch with product thinking and customer impact.
And if the explanation is cost-cutting, it’s fair to ask where companies choose to spend money elsewhere, e.g. unlimited LLM token usage with little accountability, extravagant off-sites, flying thousands of employees to expensive locations, etc.
Finally, why do they keep hundreds of job openings on their careers page? Are those false job descriptions wasting candidates' time?
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] ...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.
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.
https://www.upwork.com/press/releases/upwork-ceo-hayden-brow...
https://www.bill.com/blog/a-message-to-bill-employees-may-20...
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.
The buzzword everyone is looking for is "high-agency." (No, not those agents, but yes, those will help.) Basically employers want someone who will start something from scratch and take it to the finish line by themselves.
The interesting thing about this is, it is by definition not something you can put on your resume; It is something you show, not tell.
Yes, you need to do this even as you go through the absolute hell that is a job search. But trust me, this will a) help get a much better job, and b) help in the long run throughout and beyond your career. This will be the most valuable skill in the future.
You don’t need to use AI, but looking at the timeframes and skills in demand, yes, you very likely want to use AI.
A few other thoughts:
1. Target an area you are very familiar with. This will sharply cut down the time to MVP. This will be a challenge for the more junior folks, who should consider reaching out to senior mentors. Mentors, consider outsourcing a suitable personal project to them.
2. It could be something you are an expert on at work, if your employment contract and IP laws allow. As a bonus, releasing this as open source, or even a competing product if you’re so inclined, will have that intangible bonus of sticking it to your ex-employer.
3. Even if heavily using AI, keep your hands-on skill active. Most companies still do old-school leetcode interviews.
4. Bonus if you do something multi-disciplinary. Sprinkle in a domain you have no background in -- design, writing, sales, marketing, data science, frontend, whatever. You'll definitely need AI for this, and even when you make mistakes, few will harshly judge somebody down on their luck trying to expand their boundaries.
Hope this helps, and all the best!
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.
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.
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)
It’s good stuff but there’s room for a lot of things
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.
It doesn't matter how much revenue you have if you are spending more than that.
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.
EDIT: Now it's off the main page, because of course it is.
Maybe it's supposed to mean that it's not... something more specific?
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.
> Also the US economy is collapsing, that probably has some relevance.
Right...wait, what?
Cloudflare was overvalued and missed extreme expectations (down another 12% now).
By this time I wonder which investor still believes the AI excuse.
Happy to answer any questions, though I only check HN about once a day.
Anyone else stumbled over that part? That is not at all how I perceive CF.
So did your outages...
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
But seeing the intern hiring count the year before basically offsetting the layoff headcount makes me think they've been planning to replace their employees with interns and plug the expertise gap with AI.
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.
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.
So basically, there were too many people burning too many tokens lol
Is this not admitting that they simply can't come up with any new ideas to invest in? That their intellectual capacity has topped out?
Profitable companies laying people off like this tells me they're done innovating and now it is time to milk the cash cows for all they're worth.
Is this considered below expectations on wallstreet... enough to merit an 18% stock cut?
All this “AI bla bla efficiency bla bla agents bla bla” is a convenient excuse.
Hope everyone affected land on their feet.
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.
I am disappointed by this decision from Cloudflare. I've always felt that massive layoffs are something that companies who are greedy and don't care about their employees do (like Amazon and Meta). Up until now, my impression of Cloudflare has been that they care about their societal impact to an extent and still share old values from how tech companies used to be. Maybe they're starting the downward make-money-at-all-costs spiral that has gripped the rest of tech.
THEN I’ll be happy when management has rendered itself obsolete and becomes unemployed. Because the AI prompts used to replace the CEO and COO are trivial.
So let’s hope for the day after tomorrow!
THEN I’ll be happy when management has rendered itself obsolete and becomes unemployed. Because the AI prompts used to replace the CEO and COO are trivial.
So let’s hope for the day after tomorrow.
So basically, there just were too many people using too many tokens LOL
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.
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
is this really the future we want to build?
On a side note, I'm curious as to how "600% increase in AI usage" is measured. Are their agentic workflows' bills skyrocketed 600% in the last 3 months? That would be in line with what other people using agents are seeing (costs are way higher than they expect/used to be). In that case, that would mean that LLM/agents are no longer necessarily cheaper than human labor, no?
Labor market data this week came out stronger than expected, even as large layoffs in IT continue to happen and IT job market continues to be very slow.
> 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?
On the other hand "only" 20% for the foreseeable feature is good news? It means there is ceiling to productivity that AI offers.
Or perhaps I am giving Matthew Prince too much credit here, and this is just an opportunistic cost cutting measure.
What they'll do instead is double down and start another 100 useless AI initiatives that no one wants.
Companies are starting to realize they have a very captive consumer base. The consumers can't just move. They're collecting money.
It'll take a LONG time for a new competitor to pop up, for them to build out and start to steal customers.
Equally the cost for customers themselves to move is very high.
So in the meantime these large companies realize that by slowing down development they're not actually losing anything.
What a load of crap..
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?
TLDR:
free users make Cloudflare’s network smarter
free users create massive scale
some free users eventually become enterprise customers
and the huge traffic volume lowers Cloudflare’s own infrastructure costs.
For example, you probably don't need the extra finance person from the start-up you brought on.
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.
Either way I wish everyone affected the best and a speedy job hunt - there'll be quite a few really good people on the market now for no fault of their own.
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.
"lol jk it will totally replace you, bye"
Also just once, I wish one of these CEOs would give themselves a slap on the wrist and take a pay cut
I am getting fucking sick and tired of a “service” that behaves so much like hostile malware and spyware that it gratuitously trips the protections I have added to my browsers and refuses to let me proceed.
Cloudflare is the CP of the Internet: almost no-one wants it, yet it persists like maggots eating the eyes of children.
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.
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.