Cloudflare beat earnings, then fired 1,100 people anyway

Cloudflare had a good quarter. Revenue up. Earnings per share up — 25 cents versus 16 cents a year ago. Free cash flow up. They beat Wall Street on basically every number that matters.

Then they fired 1,100 people. Twenty percent of the company. The memo was called "Building for the future." It opened with "Today is a hard day." It said the cuts were "not a reflection of the individual work or talent" of the people losing their jobs — just that the company needed to "reimagine every internal process, team, and role" for the "agentic AI era." Internal AI use surged 600% in three months. Thousands of AI agent sessions running daily. The humans who used to do that work are getting base pay through the end of 2026 and a handshake.

Here's what nobody in Washington will say out loud: this is not a struggling company. This is a profitable company replacing workers with AI because it can, and because the quarterly model rewards it. One and a half million dollars in restructuring costs gets you a leaner org chart and a better margin story for the next earnings call. The 1,100 people get a severance letter with the word "talent" in it. Nobody on the Hill is talking about what that looks like at scale, because the people writing the policy don't know anyone who just got that email.