[throwaway2037]

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.

[NewJazz]

As an investor, it sounds fucking stupid. They aren't dogfooding, they're eating all the dogs' food.

They fired some talented folks. Folks who could be retrained. Folks whose experience snd expertise is valuable. Don't kid yourself.

[throwaway2037]

    > They fired some talented folks. Folks who could be retrained.

I see this sentiment a lot on HN. To be clear, I am responding from the perspective of US labor law and general business practices. Employment is not a sacred right in the US. The US system is (larely) hire and fire easily. As a result, the US economy is mildly unstable for the middle class normies (much, much less stable that most other highly developed nations with strong labor laws -- most of G7/G20), but overall wildly dynamic for a large economy.

"They fired some talented folks."

Sure. That is guaranteed with large layoffs. I work in an insanely competitive industry, and there are annual culls each autumn of the bottom 5%. Few are surprised by who gets cut. What is harder to forsee is a business downturn and they need to layoff X% of staff. You see good people let go. That's just life in that kind of system.

"Folks who could be retrained."

Again, in the US, for white-collar office workers, this almost never happens, and surely not for very highly skilled software developers (probably most of the layoffs at Cloudflare). It is not required by law, and it is not a common business practice in the US.

[NewJazz]

I don't care if it is or is not a common business practice. It is much cheaper than the severance package.

[mschuster91]

Unfortunately, "holistic" investors able (and willing) to look at the bigger picture and recognize that things like "institutional knowledge" cannot be expressed on a balance sheet are not the norm.

The norm - outside of outliers like Warren Buffett - is "when numbers go up then buy when numbers go down then sell".

The financialization / stonkmarketization of everything is slowly destroying our economies like a cancer.

[simianwords]

this is a low quality comment that doesn't address the simple explanation: more productivity means fewer people are required.

[weakfish]

Disagreement != low quality, and that explanation is incredibly naive and simplistic

[throwaway2037]

I would say the GP's phrase: "more productivity means fewer people are required" is perfect summary of my opinion (and post). Sure, you can flesh if out, but that is crux of my argument.

[lancebeet]

I think GPs point is that this is how they're trying to spin it, but they're not explicitly saying it, and there are doubts whether it's actually true. For outside observers it's difficult to simply ignore all the embarrassing outages that cf has experienced recently and just accept that the company has suddenly solved all their issues by using AI and firing people.

[throwaway2037]

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

I don't know what to think when I see comments like this. Everyone makes mistakes. And no one provides flawless service. If their recent issues are so damaging in your opinion, why is their business continuing to expand at more than 20% per year?

[lancebeet]

I don't think the mistakes in themselves are damaging. What seems damaging to me is that cf has, on multiple occasions, repeated the same or similar mistakes right after they made major mistakes. This makes it seem like they're not learning from mistakes. Regarding the success of their business model, I can't make a meaningful statement about it, but is that really a convincing argument? If a business is successful, does that automatically mean their product is good?

[bloppe]

> AI is increasing profitability faster than the business is growing

I don't understand how this could be the case for Cloudflare specifically. They made their name with DDoS protection and sandboxed hosting. These are exactly the products whose demand rises in lockstep with agent adoption. How could they possibly be allowing all the growth opportunity to slip past them? In times like this, with rising productivity to boot, you increase headcount, not decrease.

[zelphirkalt]

Could be they are actually not doing so well and try to cover it up with the usual AI is god excuses, to fool investors.

[blitzar]

Thanks to AI, security is more important than ever.

If A1 was real, cloudflare would be 1000% more needed and they would be falling behind with their 600% productivity gainz

[wqaatwt]

That’s what they claim, though.

On its own its just words which might or might not reflect reality. The phrasing strongly indicates its the latter, however

[zelphirkalt]

I hope this bubble bursts soon. HR people avoiding to do their actual job seems like it is the modus operandi in the majority of businesses these days.