Marc Anthony Rosa

hello

Cloudflare CEO Prince on how AI changes who gets laid off first: Two weeks ago I laid off more than 20% of my workforce. I didn’t do it because Cloudflare is struggling. We posted record revenue growth, have strong free cash flow and are adding an unprecedented number of customers around the world. I did it because business is changing, and to win the future, Cloudflare needs to change with it. We haven’t found another example in U.S. business history of a public company growing at more than 30% that laid off more than 20% of its workforce. Yet what we did is likely going to become the norm over the next year. This is a story about artificial intelligence, but executives and commentators are misunderstanding how it will disrupt business and who will be affected. AI isn’t coming for builders or sellers, but it is coming for measurers. Tireless, independent, efficient and available, AI systems can now measure an organization with a level of objective detail and precision that was previously impossible even for the best employees. For Cloudflare, internal audit previously picked a handful of business risk areas to scrutinize each quarter. Now we’re moving to a system in which every business risk is audited continuously. We’re closing our books faster. We’re making fewer mistakes and catching the ones we do more reliably. And, as CEO, I’ve never had better tools to measure exactly how the business is performing, including identifying our rising stars. The vast majority of those we laid off last week were measurers. We cut middle managers across the organization because AI allows us to have more direct reports per manager while still measuring and mentoring our teams effectively. We consolidated our operations functions into a single group that can support teams across the business, using AI to gain specific expertise when needed. We significantly reduced our marketing team, which, like in most companies, was teeming with measurers. Across our finance team, we found opportunities to consolidate and automate. We received almost a million applicants for 1,111 paid internships this summer. The interns we hired are extremely qualified and AI-native. They’re all builders or sellers, and we expect that the majority will get full-time offers.