Cloudflare CEO Matthew Prince laid off more than 20 percent of the company's workforce, despite record revenue. He says middle management, operations, and compliance roles are the ones AI is replacing.
Prince writes in a guest column for the Wall Street Journal that Cloudflare is posting record revenue, strong free cash flow, and more new customers than ever. Still, he cut more than 20 percent of the workforce to prepare the company for what he calls a "changing business" in the age of AI.
There's no comparable case in US business history, Prince claims: a public company growing at over 30 percent while also cutting more than 20 percent of its staff. He predicts this kind of move will become the norm within a year.
A three-role framework decides who gets cut
Prince builds his argument on Peter Drucker's 1954 book "The Practice of Management," dividing roles at every company into three rough buckets: builders, who develop the product; sellers, who close deals; and measurers, who handle oversight and control functions like internal audit, revenue recognition, middle management, and marketing.
