Cloudflare reported record revenue then cut 20% of its workforce; CEO Matthew Prince says AI has rendered an entire category of workers obsolete

(SeaPRwire) –   Since ChatGPT rolled out its initial AI model in late 2022, the possibility of AI-driven layoffs has been a hot topic in Silicon Valley and on Wall Street. This year, several tech firms are making that scenario a reality—and Cloudflare is among the most recent to join them.

In a Wednesday op-ed for The Wall Street Journal, Cloudflare CEO Matthew Prince explained his reasoning. The company is growing rapidly—it just reported record revenue growth and is expanding its global clientele. Even so, Prince noted that the tech company cut 20% of its staff earlier this month, with middle managers bearing the heaviest impact of the reductions.

“Most of the people we let go last week were ‘measurers,’” he stated. He described “measurers” as employees in middle management, finance, legal, internal audit, and revenue recognition roles.

Cloudflare is a connectivity cloud and internet security company based in San Francisco. As of 2025, it has over 5,000 employees and operates on a hybrid work model (mixing remote and in-office work) across 13 offices worldwide.

AI-linked layoffs are becoming common in the tech industry. Jack Dorsey’s Block reduced its workforce by 40% in February. Meta just this week cut 10% of its staff, with CEO Mark Zuckerberg cautioning employees in a memo that in the AI era, “success isn’t a given.” A recent report from outplacement firm Challenger, Gray & Christmas found that 49,135 U.S. layoffs this year have been attributed to AI—almost as many as all AI-related layoffs recorded in 2025.

However, some business leaders suspect that at least part of these layoffs are due to “AI-washing”—cutting staff for reasons unrelated to AI-driven efficiencies but blaming the technology for convenience. Several tech companies have been trimming bureaucratic excess after the hiring spree at the end of the COVID-19 pandemic. Marc Andreessen, co-founder of Andreessen Horowitz, spelled out this strategy clearly in a recent interview on the 20VC podcast.

“Basically, every big company has too many employees,” he said. “I think many of them are overstaffed by 75%,” he added, “And now they all have the perfect excuse: Oh, it’s AI.”

When asked for a comment, Cloudflare directed attention to Prince’s Wall Street Journal op-ed and a blog post co-authored by Prince and Cloudflare COO Michelle Zatlyn, which includes the email the company sent to its global staff to announce the layoffs. The email states that the firm’s agentic AI strategy requires these layoffs and also details the severance package provided to impacted employees.

The advantage ‘builders’ and ‘sellers’ could hold in the AI economy

Regardless of the reason, Prince said the company retained what he refers to as “builders”—like engineers. This assertion contradicts the idea that software engineers are among the most at risk from AI, given that the technology can write code effectively, particularly since Anthropic released Claude Code. He noted that “sellers” are also fairly protected from automation. Prince emphasized that the layoffs weren’t about cutting staff numbers but about changing the type of work done; the company has a record number of job openings in “growth-driving areas,” he said.

A recent study by Anthropic backs up some of Prince’s claims about which jobs AI can automate. The study revealed that AI is theoretically able to handle most tasks related to finance, legal, and management positions. It also found that the technology can perform tasks done by builders and sellers, including most of those carried out by engineers and sales representatives.

Early in his op-ed, Prince argued that AI’s ability to measure performance now exceeds that of even the top human employees—a claim he thinks justifies other companies following his example.

“AI systems are tireless, independent, efficient, and always available. They can now assess an organization with a level of objective detail and accuracy that was once unachievable, even by the most skilled employees,” he stated.