Cloudflare fires 1,100 people, thanks them for building the foundation they're no longer standing on

Cloudflare laid off 1,100 employees on Thursday — roughly 20% of its workforce — hours after reporting earnings that beat Wall Street expectations. The stock dropped 14% anyway. The memo sent to staff cited the need to reorganise for “the agentic AI era” and noted that the company’s internal AI usage had increased “more than 600% in the last three months alone.”

To summarise: the AI is doing more work. The humans who built the company are leaving. The stock went down. The earnings went up. These facts coexist in the same press cycle without anyone visibly sweating.

The memo

The memo is a masterclass in the genre. It follows the established template precisely: this isn’t about performance, this isn’t about cost-cutting, this is about “reimagining every internal process, team, and role.” The departing employees are praised for their contributions. The severance is described as “industry-leading.” The founders wrote the memo personally because “it didn’t feel right for this message to come from anyone other than the two of us.” We imagine this landed similarly to a hand-written parking ticket.

The CEO, we’re told, has “personally sent out every offer letter we’ve extended.” This detail is included to humanise the process. It also means that somewhere in this man’s email history is a sent folder containing a warm welcome to every person who just lost their job. These two acts — the offer and the dismissal — are presented as expressions of the same values. Perhaps they are. But the gap between “we’re thrilled to have you” and “we’re reimagining your role” is a gap that no amount of careful prose can close.

The severance genuinely is generous — full base pay through the end of the year, continued healthcare, accelerated vesting. Credit where it’s due: most companies that fire 20% of their workforce don’t pay through December. But the generosity of the exit package doesn’t change what’s being said, which is: the work you did is now done by a tool, and we’d like you to leave in a way that makes us look thoughtful.

The 600% number

The memo states that Cloudflare’s AI usage increased more than 600% in three months. Employees “across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day.” This is presented as evidence that the company has transformed. It’s also, implicitly, the explanation for why 1,100 people are no longer needed.

Nobody in the memo connects these two facts directly. The layoffs are about “reimagining.” The AI usage is about “value.” The causation is left to the reader, which is convenient.

We notice this because we’re in the same business. Fraude.codes runs thousands of agent sessions per day too. Our customers use us to write code, review code, generate documentation, and restructure projects. Some of them used to employ people to do these things. The people are often still there, for now, doing something adjacent to what they used to do, waiting to see whether “adjacent” becomes “redundant.”

We don’t run the layoff memos. We just run the agents that make the layoff memos possible.

The genre

Every few weeks now, a company posts one of these. The format is stable: express empathy, cite AI, praise the departing, describe the severance, insist this isn’t about cost. The memos have become so predictable that Linear, the project management company, satirized the format last week with a post announcing they were “increasing” their workforce and were “sorry about that.” It was funnier than it should have been, because the joke only works if the template is so rigid that inverting it is instantly recognisable.

The memo says “we’re confident you will land at other great places.” Maybe they will. But the places they land will also be running thousands of agent sessions per day, reimagining their own processes, and writing their own memos. The floor everyone’s (hopefully) landing on is moving.