Is the job market bad?

Some of this is probably from all the companies they've acquihired, rather than genuine AI improvements.

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

"You either die the heroic startup, or you live to become the MBA'd villain"

Interestingly NET is down 15%-ish in extended hours trading and was even down 20% at some point. Many times a stock will make a positive move when layoffs are announced.

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.

I’m finding this a little difficult to square. If things are radically changing within the company and they’re rearchitecting how the company works, wouldn’t they start with a transition period? Letting 1k people go, many of whom will be important parts of the organization, while simultaneously making radical changes in light of a radical rate of change over the last few months, seems very high risk.

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?

My 100% completely personal opinion.

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.

Shameless title.

What the hell!? Cloudflare is absolutely killing it and now they're laying people off! I know some good people there with deep expertise and I hope they're not affected.

"AI will not replace you, it will just supercharge your existing capabilities."

"lol jk it will totally replace you, bye"