Cloudflare CEO Takes on Layoffs and AI Value Creation

Cloudflare has announced workforce reductions affecting 20% of staff, with Chief Executive Matthew Prince outlining the decision in an op-ed published in the Wall Street Journal.

According to Matthew, the "vast majority" of those affected were "measurers", which he defines as people in middle management or finance, legal and internal auditing functions.

The move comes as technology companies continue to cite AI as a factor in workforce restructuring. According to job cut data, AI was listed as the leading cause for job reductions in the US for both March and April.

In a joint statement with Michelle Zatlyn, Chief Operating Officer of Cloudflare, Matthew clarified the cuts were made "not as a cost-cutting exercise" but were about how the company is "defining how a world-class, high-growth company operates and creates value in the agentic AI era".

Retaining builders and sellers

Cloudflare is retaining and hiring what Matthew calls "builders", such as engineers, and "sellers", which he views as roles less vulnerable to AI displacement. This shift in workforce composition reflects Cloudflare's high numbers of open roles in "areas that drive growth".

The company is not alone in reducing management layers. Coinbase cut 14% of jobs in a restructuring that involved flattening management structures.

Brian Armstrong, Chief Executive of Coinbase, shares in an email to staff that the company was "fundamentally changing" its organisational structure, so there are just five layers below the Chief Executive position.

He suggests that this move ensures that everyone in the company is a "strong and active contributor".

"Managers should be like player-coaches, getting their hands dirty alongside their teams," he argues.

Back in startup mode 

Ryan Breslow, Chief Executive of Bolt, has also shared that his company is reducing its organisational structures.

At the Fortune Workforce Innovation Summit, Ryan shares that the company had made the decision to cut its entire HR department as part of efforts to return to a more agile, startup-style model.

"We're back in startup mode again and those HR professionals have really important insights when you're in a peacetime and when you're at a larger company," he tells attendees at the Workforce Innovation Summit.

Bolt's elimination of its HR function demonstrates how technology companies are reassessing which internal structures remain necessary as AI tools become more capable of handling traditional administrative functions.

AI capabilities in measurement

Matthew suggests AI capabilities could begin to overtake more people in workplace measurement functions. "Tireless, independent, efficient and available, AI systems can now measure an organisation with a level of objective detail and precision that was previously impossible even for the best employees," he says.

Amrita Ahuja, Chief Financial Officer and Chief Operating Officer of Block, agrees.

After the company's decision to cut around 40% of its workforce in February, she shares at the WSJ CEO Council Summit that "It feels like the acceleration is actually only quickening and we are seeing, really, an inevitability at this point around productivity gains and what that means for us as a business."

When asked if she believes other companies will follow a similar path, Amrita says: "I think it's an inevitability. As a CFO, I think it's better to be a little bit early than to be too late here."

Financial leaders across most technology companies are now openly discussing workforce restructuring as an inevitable response to advancing AI capabilities rather than a temporary cost-cutting measure.