I'm sure this is going to happen a lot to big companies, with AI they are all going to find they have too much staff and are not likely to benefit from a higher pace of development. Smaller/Mid size companies on the other hand are likely limited in how much staff they can take on and AI just accelerates their plans (I'm in a company like this).

> The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms.

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

This seems kind of a critical point in time. I consider Cloudflare to be one of the more serious engineering organizations based on the quality of the products. Assuming they are not lying, them cutting 20% workforce citing AI signals there is actual teeth to this AI optimism.

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.

My response to this, as a generally satisfied CloudFlare customer who was excited to try out agentic email, is that it's not a good time to increase the amount of business I do with them.

Isn't the most likely explanation here that they needed to show in their earnings call how their bet on becoming AI infrastructure is leading to high revenue growth expectations, and that isn't happening (yet)?

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.

Really sorry to see the news about the RIF. My thoughts are with everyone affected.

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

Why are they laying off anyone when you got 500 million plus in pure profit. The tax system needs to be reworked to not incentivize layoffs. Major taxes should happen to support the well fair system in order to support people laid off. This is a stupid system we live in.

I don't see how laying people off isn't inherently and always a "cost-cutting exercise." If they had an unlimited budget, they probably wouldn't be laying them off, right?

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

what does this mean for https://blog.cloudflare.com/cloudflares-commitment-to-free/

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.

With the hiring 1111 interns thing, I think these companies (amazon as well) need to realize this is doing anything but inspiring confidence in those interns. Instead of being excited about going there, more of them would opt to go elsewhere instead of returning full time, or if they do return full time they'd be in fear of being let go next.