I’ve seen managers hiring people with an intent to lay them off when winds change to protect themselves and their close circle. I can only imagine they’ve had great KPIs in both cases: first for scaling the team, and then for cutting costs.

Worst way to grow the company by 11 people

Both of those are true assuming the lay offs come from different demographics.

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"

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

Those 11 damn lucky interns!

Why should a company continually grow in headcount?

So they basically fired all the interns? Can anyone who works or knows someone who works for Cloudflare can confirm?

i saw this ALL the time at past employers. Employers higher all kinds of interns who eagerly get truck loads of work done and build great connections. and 2 years later the company is getting sold off, out of business, or mass lay offs all over the place. what's the point of highering all those interns in the first place?? geez.

Wonder if they'll do it like they did for Brittany Pietsch. She recorded her firing video some years ago. I think it's on tiktok but there are youtube videos discussing it as well.

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.

Didn't know about Yogi Bera's quotes: https://en.wikipedia.org/wiki/Yogi_Berra#%22Yogi-isms%22

Opus 4.6 was released between those dates

Are they taking the piss by hiring and firing the same number as their public DNS IP ?

> The number of our intern goal, a nod to our 1.1.1.1 public DNS resolver, is intentional.

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.

The skeptical assumption is they need to pay for the AI bills, not that the AI use is actually providing the promises CEOs are making.

About as awkward as "Q1 revenue up 34% YoY". https://www.techmeme.com/260507/p43#a260507p43 https://www.bloomberg.com/news/articles/2026-05-07/cloudflar...

Imagine if they hired those 1111 to do the most massive nine-month-long live coding interview and only 11 pass the bar.

They have a reputation to maintain, otherwise it will be difficult to recruit the best people in future. That being said, damn, that is a very generous package by any measure.

Damn. I got two weeks notice and then got shown the door with nothing. And now I get to compete with all these people who are going to be so much less stressed

I want to agree, however, it will take every bit of that time for some to find new placement. These AI cuts aren't just making it harder to keep a job, but harder to get a job as well.

Have there been any better tech layoff packages in the last few years?

This is probably the best, wow.

In Europe they’re pretty much obligated to provide this package

it's all marketing wank, but how can they "supercharge the value delivered to customers" through company restructuring? whether they hire 50k more people or fire everyone, the value delivered to the customer depends on the quality of the product and the price - irrelevant of cloudflare's margins.

Here, I translated it for you (https://translate.kagi.com/?from=linkedin&to=en_us)

"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."

I will reply here assuming that you posted with good intent. I think that their PR statement is reasonable from an investor perspective. Try to detach yourself from the personal effects of layoffs. In short, they are saying: Thanks to AI, we don't need as many people to run our business. It is pretty clear to me. Sure, you can be angry about the layoffs, but the economics are clear: AI is increasing profitability faster than the business is growing, so they are using layoffs to reduce costs. Imagine that you have an HR team of five people. If AI has dramatically improved worker efficiency, can you have an equally effective HR team with only four people? That is basically what happened here.

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

> 20% of people were sitting around without any work to do

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

You also have to consider nowadays whether a human even wrote most of it, or if is just a tale told by an idiot, full of sound and fury, signifying nothing.

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.

Of course it's a lie. Cloudflare is saying, essentially: "AI is making us so profitable that we've decided to reduce our profit by 20%, to keep it reasonable."

Aka bullshit

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Which part of that sentence was confusing? I found it perfectly clear. Their internal AI use is exploding, which is a signal that they need to structure for that, and so they’re laying people off as one of the first steps towards actioning that signal.

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

Good luck, and if we can help at all, let us know.

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

CV link: https://piperswe.me/cv.pdf

That sucks, and the market is too bleak for empty platitudes.

This just sucks, period.

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

You probably have other stuff on your mind right now, thus I can understand if you are not in the mood for answering, but I‘m too curious to not ask:

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?

Good luck, I'm sure you will find a great role!

good luck and take care of yourself!

Dude, you have the most amazing name ever. Hope you know that.

Goodluck mate

"A company finds itself with surplus labor capacity due to the efficiencies in AI"

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.

> A company finds itself with surplus labor capacity due to the efficiencies in AI

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.

I think as someone pointed out earlier, this is more likely about margin preservation as their gross margins are deteriorating really quickly.

Excess labor would only translate to increased revenue and new products if these companies had a product vision to begin with. But they don't, so people get sacked.

If using AI had a "substantial profit or revenue growth" wouldn't it make more sense to hire more people so they can use more AI and increase revenue?

This is simply a symptom that the company doesn't have good Quality Control processes in place.

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.

> 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.

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

That's the thing. There is no surplus labour capacity, neither they have any ideas for moonshot projects that could pay off left

cloudflare vibecoded a wordpress clone (emdash), they have no idea where to allocate engineers to make new products.

" Secretly hoping they'll have to rehire."

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.

> I was trying to hire more people because we're so busy with everything we needed to do

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

> Seeing who is being laid off, especially on my team, it's the people who make things run.

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

In my experience, companies never value transparency. And it's doubly true for companies that boast about transparency. Obviously, it's within their authority to cut head count, but they've also obviously made some kind of major strategic shift either to cut costs or abandon some lines of business and they are not being upfront about it at all. The stock is up 111% over 12 months. They don't seem to be in any danger of crashing or collapsing.

> Seeing who is being laid off, especially on my team, it's the people who make things run.

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

This genuinely wouldn't surprise me, and I need to go back to looking at balance sheets to see if I can sus out the validity of that narrative. As AI subsidization ends prematurely and costs skyrocket, we should expect to see those costs reflected in the operation statements of major customers.

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.

Rings true because now teams end up building a lot of things that may or may not have alignment to customer/business needs.

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.

They're laying off the people who can't produce a minimum of 2x with AI, and keeping the maximalists with no life outside of work barely keeping up with the 100k LOC a week they're shipping to prod.

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.

This is no that far fetched... I don't think it's that common that a customer sits on the fence and says "If only company X had Y on their feature list I'll be a paying customer". So the speed at which the company now runs through its roadmap does not equate to new customers joining.

This links closely with this article i came across: https://readuncut.com/the-social-contract-is-broken/ how basically corporations are pursuing greed at such high levels.

This is a great article, actually. It does gather many of the empirical data I have seen and felt but were unable to put into word.

Personally, I think AI is just a convenient scapegoat for these mass layoffs. Also, these kinds of announcements contribute to sustaining the AI hype which all tech investors benefit from. And investors looove hearing about mass layoffs, stock goes up every time without fail.

I wouldn't argue that it doesn't give any benefits. However, it's not worth the current cost unless you already own RTX PRO 6000 to run any reasonable LLM. I'm using Claude Free and I'm happy with what I get, especially for the cost of $0.

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

I mean even this blog from Cloudflare reads a little like that.

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this is such a cope take i don't even know what to say. how can people believe in obviously false things like this? like what's the mental model here?

Businesses tend to choose them because they're cheaper than alternatives.

Oh less than Atlassian. Suprised.

I think about investing in Cloudflare but that P/E ratio scares me off every time.

Kind of makes me wonder if the "more than 1,100 employees globally" actually means "1,111" employees. Talk about committing to the bit

What is an intern in this context? When I hear "intern" I think of a summer internship. Are there other types for software developers?

2008 really wasn't that bad if you were in tech...

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.

It's not that simple.

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!

It's AI but not in the way you think.

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.

I don't think so. I think this is a common narrative in Hackernews when layoff news are shared. All the people I talk to in the industry positively confirm a boost in productivity. Its contribution to actual revenue could lag but it is present and confirmed by many.

Nah, even insane token costs don't come close to the costs of labor.

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).

Yes. We've since changed the top link to a third-party article. We prefer to do this with corporate press releases* - this is probably the #1 exception to HN's "please post the original source" rule (https://news.ycombinator.com/newsguidelines.html). If anyone sees a better third-party article, we can change it again.

(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...

Maybe I've become cynical and jaded, because when I saw the title I immediately thought to myself "oh, Cloudflare's announcing a layoff."

It's interesting how every time there's a layoff, the blog post always has a title like "Preparing for what's next" or "An update on our workforce" or "Getting ready for the agentic era"!

The title should be something like "Cloudflare reducing workforce by more than 1,100 employees globally".

I’ll never forget how when I was at Google, every email with subject line “An update on X” meant X was getting axed. Like, just say so in the subject line…

Two days ago: “Today I've made the difficult decision to reduce the size of Coinbase by ~14%” (layoffs) https://news.ycombinator.com/item?id=48021368

> "Building for the future" gave me the impression that it's about some major new initiative...

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] ...

This is what the true definition of "AGI" is.

Welcome to the corporate world

Gross margin doesn't include r&d and it looks like a bunch of engineering was laid off too

Yikes, so incremental margins are in the 50s. I think this says it all.

Whatever the play here they can’t be angling for any external PR or internal morale boost. What if they wrote: “This is a tough economy and we have to tighten our belts.” Maybe that’s naive of me. Bad signal to investors as opposed to insignificant employees and commoners (PR)?

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.

They're still keeping the interns. Feels very much like a 'replacement'.

The bottleneck is never code

I don't think productivity boosters lead to net hiring or firing, but I do think they lead to higher wages.

Wow, the way Upwork is handling this seems really bad. They announced the layoffs today, but nobody will know who is being let go until next week! Sheesh.

I know this is cold comfort, but in times like this, it can be a good idea to start your own company. Cloudflare itself was founded in the wake of the GFC (post-2008), when tech was dead as a doornail. The best time to start something is when awesome people to work with are unemployed.

it's about the comments / votes ratio.

Doubt. The eng teams I know lost 15-25% of their SWEs.

The sre team I was hired onto last month, just lost 2 of ~12.

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.

Prince is a sociopathic liar

The level of group think here is unbelievable. Any opinion other than this is down voted immediately. A whole page of people bargaining and not wanting to face reality.

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’s not like this is a factory floor where you process something coming in and AI suddenly makes the process more efficient and people are idle. Every team in tech world has infinite backlog, you don’t fire 20% the minute someone manages to close a few tickets.

Many CxO made a decision to spend $$$$ on AI; that's their bet and they're are adamant about it. Money should come from somewhere and layoffs is the easiest way to free some budget in a software company. Was it a good bet only time will tell.

Yeah I'm there with you. I got lucky as a kid with delving into this as a hobby and it turned into a professional career. Thought we could change the world for the better, what we made instead was social media cancer and LLMs that can pretend to make everyone 10x more productive. I loathe it.

Yes - I was thinking about starting my own business but am staying put instead and saving as much as possible.

Absolutely. News like this is so hard to ignore. Nervous as hell to drop big money on things the family needs right now. Grateful to have a job, but life overall was just better in almost every sense before AI became part of our daily vocabulary and layoffs occurring every couple of weeks.

I've been out of work since almost a year ago after getting laid off and the same is true for a lot of my coworkers; the job market is absolutely broken in half for a lot of different but related reasons. Thankfully I have significant savings and low costs so I can just coast and do stuff in my own time, but the same hasn't been true for others I know.

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.

Yes, their revenue was $639m but their expenses were $702m.

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

Are you trolling or just trying to avoid saying they didn't make any money and actually lost over $20 million?

Revenue != profit.

Thousand people cost 60m USD of quarterly _profit_ though (not even revenue)

There's multiple simultaneous narratives: the industry-wide one of slashing well-paid tech talent under the guise of AI productivity boosts, and what's actually going in at each company.

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.

Coinbase lost 40% transaction revenue. The AI thing is just smokescreen

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

Employees cost money. The ZIRP free-money era has ended. Companies have been laying off tech people for the last few years.

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

AI productivity is a lie. It’s AI spending because the revenue hasn’t gone up.

I think there's also a certain permission structure that once one sufficiently large org does a big round of layoffs and doesn't get punished, a bunch of others will run the same playbook. We've seen this before -- back in 2022 when Elon fired like half or more of Twitter and the service didn't immediately implode, it gave other CEOs permission to do massive layoffs in the guise of "efficiency" even though the real reason was ZIRP was over. Now they're claiming it's because of AI when it's really that their margins are eroding because the overall economy is slumping and they need to offset AI spend.

Is Coinbase that major though? they're always doing lay-offs.

Meta's layoff was also last week, much bigger than both.

Coinbase for sure is driven by declining Bitcoin fundamentals and entry of other big players in the Trump inner circle. The AI narrative is a lie.

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

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

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Unlike the other hyperscalers, they don't attempt to wring every last dollar from their customers' wallets.

> When a company is so much motivated by the profits

That is what a company is for.

20%

Their hiring process is remarkably bad for a company that otherwise is so well run. My most recent experience was them throwing a workday link at me to fill something out before we even had the initial phone screen and the forms/ui was so poorly designed that I stopped responding to them.

This is literally every public company you just described. Companies do not have loyalty to their employees.

You only have to be there for the company in that you do work for them and they give you money in return. Any tech guys working for them will have received plenty of money. I feel sorry for the non-tech people though (HR, recruiters, etc.).

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.

Yes I am jealous. I'm on unemployment paying out of pocket for health insurance and my unvested stocks disappeared.

The future, for those who have the capital. The rest may die, shareholders don't care.

I interviewed, they didn't want to allow remote, requiring me to immovable move to Dallas. The rest of the team was in 5 other cities.

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

...

Someone who knows the product deeply and has grown it into what it is today will always stay valuable.

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.

[dead]

The interns are training their replacements. Efficient.

Who are you?

>It seems only costs increased. If productivity had increased along with the AI costs they wouldn't need to layoff.

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.

So you suggest they give out free money to people they don't need?

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?