BNP Paribas analysts recently spotted a striking contradiction. Even though Cloudflare cut 20% of its workforce earlier this year, the tech company's engineering ranks have surged.
Cloudflare employed 1,308 engineers in December. That figure has climbed to 1,894, a 45% jump, according to data BNP crunched from LinkedIn.
I ran the numbers past Cloudflare CEO Matthew Prince, who confirmed the trend. So why would a company slash so many jobs while ramping up engineering hiring? His answer reflects how AI is changing the structure of companies across the tech industry, and potentially beyond.
Prince's first takeaway: AI ain't killing tech jobs. That's backed up by other data. Open tech roles posted by tech companies are up 14% so far this year, according to TrueUp, a tech jobs marketplace. Open hardware engineering roles have jumped 52%.
Instead, AI is changing which jobs companies value most.
Prince says three broad groups make up most modern companies: builders, sellers, and measurers. Builders create products. Sellers persuade customers to buy them. Measurers track, audit, manage, report on, and coordinate the business.
Builders are secure in an AI world, according to Prince. In fact, he said, if Cloudflare's builders (engineers) become far more productive with AI, he will hire even more of them.
Sellers also remain essential because customers still want to buy from people they trust, who understand their problems and can fix them.
Measurers are where the AI axe is falling, Prince said, because this new technology increasingly handles these functions constantly and thoroughly. Most of Cloudflare's layoffs earlier this year focused on these measuring roles:
- Middle managers were cut.
- Operations shrank into a single group.
- Finance was consolidated through more automation.
- Marketing was slashed because, like in many companies, this department was riddled with measurers, the CEO said.
The result: fewer people tracking things and more investment in people actually doing the core work of building the business.
That's a healthier reset than most AI doomer predictions — even if that's cold comfort for those caught in the transition.
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Alistair Barr is the author of Business Insider's Tech Memo newsletter. Sign up here. Before that, he was BI's Global Tech Editor and the Big Tech team leader at Bloomberg, following a reporting career at The Wall Street Journal, USA Today, Reuters, and MarketWatch. Alistair won a Gerald Loeb Award in 2007 for coverage of short selling and was a finalist in 2013 for scoops on the Facebook IPO. More recently, he won a 2024 San Francisco Press Club award for commentary. Got a tip? Reach out using the secure messaging app Signal (+1 415-341-4927) or via email on [email protected].ExpertiseAlistair oversees all things Big Tech, along with startups and venture capital. He writes analysis and columns about topics including generative AI, large language models, cloud computing, semiconductors, online search, e-commerce, EVs, robotics, and autonomous vehicles.Popular StoriesArtificial Intelligence:It's getting harder to make big leaps at the frontier of AIOpenAI's AI-adjusted earnings numbers have echoes of Groupon and WeWorkDeath by LLM: Stack Overflow's decline, and its plan to survive, shows the future of free online data in an AI worldCloud computing:Amazon dominated the first cloud era. The AI boom has kicked off Cloud 2.0, and the company doesn't have a head start this time.In cloud, there's AI (which is hot) and everything else (which is not)Chips:Why Intel is still so important: Real countries have fabsApple's made-in-the-USA chips signal a turnaround for the US's big semiconductor betEVs and Tesla:Tesla's AI supercomputer has a Silicon Valley town rushing to meet surging electricity demandTesla's Cybertruck is outselling almost every other EV in the USOnline Search:Google is losing its status as a verbA simple way to fix search: Bright pink ads
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