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"

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.

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.

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

This just sucks, period.

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

Nowhere did they indicate there is less work to do, in fact quite the opposite.

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.

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?

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

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.

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

(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...

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] ...

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.

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).

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

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.

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

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

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

That is what a company is for.

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.

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.

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

...

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.

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.

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?