Cloudflare CEO: Workforce Cuts Will Deliver Growth

According to the Wall Street Journal, Matthew writes that the "vast majority" of these layoffs were "measurers" – which he defines as people in middle management or finance, legal and internal auditing functions.

The company joins multiple technology firms attributing job cuts to AI implementation. The technology was listed as the leading cause for job cuts in the US for both March and April.

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

Growth roles remain prioritised

Cloudflare is retaining and hiring what Matthew calls "builders," such as engineers and "sellers" as the company reduces measurers. Matthew sees these roles as less vulnerable to AI replacement.

This could shift the nature of work at the company. Matthew notes that Cloudflare has high numbers of open roles in "areas that drive growth."

The move suggests a focus on revenue generation and product development over internal oversight functions. Sales teams and engineering departments appear central to the company's restructured workforce model.

This approach could indicate how growth companies balance automation with human capital in customer-facing and technical development areas.

Management layers under scrutiny

Cloudflare is not alone in reducing management structures. Coinbase cut 14% of jobs through what it termed a strategic flattening of management structures.

Chief Executive Officer Brian Armstrong shares in an email to staff that the company was "fundamentally changing" its organisational structure, so there are just five layers below the CEO position. This, he suggested, ensures everyone in the company is a "strong and active contributor."

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

Ryan Breslow, Chief Executive Officer of Bolt, has also reduced organisational structures at his company. 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 told attendees at the Workforce Innovation Summit.

Technology replacing oversight functions

Matthew suggests AI capabilities could begin to overtake more workplace roles as the technology improves. "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.

Following 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."