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.
how is this not more obvious?
- no one clicks the link
- no one looks at looms
- no one hits “see more”
- no one looks at case studies
- no one looks at your attachments
unless, it’s co-authored …
Hire out of pain. Don't hire because you think you'll need someone soon or maybe sometime later. Wait until you or your team are actually hurting: working weekends, missing family dinners, dropping balls. That pain is the signal that the role is real. I learned this the hard way after watching founders (including myself) hire ahead of need and end up with people in roles that weren't fully formed yet. When you hire out of pain, you know exactly what the job is because you've been doing it yourself. You can evaluate performance because you know what good looks like. And the new hire knows you'll step back in if they fail, because you were just doing it last week.
The company hired me to lead their "Agile Transformation."
I don't know what Agile means.
Nobody does.
That's why it works.
I make $425,000 a year.
To move sticky notes.
From left to right.
On a board.
The board is digital now.
The sticky notes cost $80,000 in Jira licenses.
Progress.
Day one, I said "we need to break down silos."
Everyone nodded.
Silos are bad.
I don't know why.
But destroying them is a career.
My career.
I introduced "squads."
Squads are teams.
But disrupted.
We disrupted the teams into teams.
Different names.
Same people.
Same problems.
But Agile problems now.
Agile problems are strategic.
A senior engineer asked what we're actually changing.
I said, "The mindset."
He asked what that means.
I said, "It's a journey."
He asked where we're going.
I said, "Toward agility."
He asked what agility means.
I pointed at the sticky notes.
They were moving left to right.
That's velocity.
We have velocity now.
The VP of Engineering said two-week sprints don't fit their work.
I said, "That's waterfall thinking."
Waterfall is bad.
Like silos.
I don't know what waterfall is.
But I know it's bad.
She stopped talking.
Waterfall accusations end conversations.
We had a retrospective.
In the retro, we discussed what went wrong.
Everything went wrong.
We put it on sticky notes.
Then we moved the sticky notes.
Into a column called "Parking Lot."
The Parking Lot is where problems go to die.
It's full.
We don't look at it.
That's agile.
Velocity is up 40%.
I defined velocity.
I also defined the points.
I also defined the stories.
We're crushing it.
At the things I made up.
To measure.
Ourselves.
The CEO asked for ROI.
I showed a chart.
The chart went up.
Charts should go up.
This one did.
I didn't label the Y-axis.
Nobody asked.
Leadership is confidence.
We do standups now.
Every day.
We stand.
For 45 minutes.
Standing is agile.
Sitting is waterfall.
My legs hurt.
But we're transforming.
The transformation is now "Phase 3."
Phase 1 was assessment.
Phase 2 was implementation.
Phase 3 is "continuous improvement."
Continuous means forever.
Forever means job security.
I'm very secure.
My contract was extended.
Three more years.
For "cultural impact."
The culture is confused.
But impacted.
Agile transformation isn't about being agile.
It's about transforming.
Continuously.
Toward more transformation.
The destination is the journey.
The journey is billable.
In the first 5 years of @airwallex, we made a massive hiring mistake.
We brought in people with impressive résumés – ex-bankers, payments veterans, people who had worked on the SWIFT network.
On paper, they looked perfect. In practice, they nearly broke our culture. They had a lot of experience, but they weren’t builders. They knew how things used to work, not how things should work.
What we really needed were people who were curious, determined, and optimistic, who believe in the vision. We didn’t hire for that early enough – and we paid the price. Morale took a hit. Momentum slowed. It was painful to go through.
The lesson? Hire for belief, grit, and the ability to build – especially early on.
Because in a startup, mindset scales faster than experience. And the wrong hires can cost you more than just time – they can derail your culture.
Most early-stage founders think that they're doing "enterprise sales" when they speak to any company with more than 250 employees.
True enterprise sales looks something like:
Day 1: first meeting (over Teams or WebEx) with 3 people with "analyst" or "associate" or "assistant" in their titles.
Day 25: second meeting. 14 people are in the call and you spend 25 minutes of the 45 minute meeting on intros. There are 11 associate district managers there for some reason? 9 of the 14 people have to "drop early" for another meeting.
Day 66: after 28 emails to get this meeting scheduled, it gets pushed out 2 months because Bill from legal is swamped and Terry is out of town.
Day 127: the SVP you need to meet with joins the call with 21 other people. She has zero context and you need to start from the top. Meeting goes well and follow ups are set.
Day 131: you see that the SVP you met just posted on LinkedIn that she's leaving the company, and you go back to the drawing board and restart the cycle.
I'VE SEEN TECHNOLOGY RESHAPE OUR WORLD REPEATEDLY. PREVIOUS TECHNOLOGY PLATFORMS AMPLIFIED HUMAN CAPABILITIES BUT DIDN'T FUNDAMENTALLY ALTER THE ESSENCE OF HUMAN INTELLECT. THEY EXTENDED OUR REACH BUT DIDN'T MULTIPLY OUR MINDS.
Artificial intelligence is different. It's past the point where a difference in degree becomes a difference in kind. AI amplifies and multiplies the human brain, much like steam engines once amplified muscle power. Before engines, we consumed food for energy and that energy we put to work. Engines allowed us to tap into external energy sources like coal and oil, revolutionizing productivity and transforming society. AI stands poised to be the intellectual parallel, offering a near-infinite expansion of brainpower to serve humanity.
AI promises a future of unparalleled abundance. However, as we transition to a post-scarcity society, the journey may be complex, and the short term may be painful for those displaced. Mitigating these challenges requires well-reasoned policy. The next 0–10 years, 10–25 years, and 25–50 years will each be radically different. The pace of change will be hard to predict or anticipate, especially as technology capabilities far exceed human intelligence and penetrate society at varying rates. (1/25)
https://t.co/eB7SE8BsDv
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