If AI made Cloudflare more productive, the layoffs are the wrong move

Cloudflare laid off more than 1,100 people yesterday, around 20% of the company. The announcement, titled ‘Building for the Future’, explains the cuts by noting that internal AI use is up 600% in three months and the company needs to ‘architect itself for the agentic AI era’. The stock dropped 15-18% in after-hours trading. I work at a Cloudflare partner, build on the Developer Platform daily, and have spent the last few years arguing that the platform is the strongest place to put new edge workloads. So when I say the public reasoning here does not survive five minutes of scrutiny, it is not contrarianism. It is concern. The argument Matthew Prince and Michelle Zatlyn put forward is that AI has made the workforce so productive that the company can be smaller. If that were true, the rational move would be to hire more, not fewer. Cloudflare sits in front of a substantial portion of internet traffic and sells exactly the products that benefit from agent traffic going up: DDoS…