Interestingly NET is down 15%-ish in extended hours trading and was even down 20% at some point. Many times a stock will make a positive move when layoffs are announced.

Cloudflare is a growing company by most metrics so if efficiencies through AI were the reason for the layoffs they'd just take the boost and grow even faster.

It all doesn't check out and I think the real reason for the layoffs and the negative sentiment by the market on the news is that their revenue growth was not as fast as their expenses and they realized they overhired. Leadership doesn't want to dive too much into the red even if it would mean bigger growth down the line. They are now beholden to the near and mid term stock performance.

I've had the chance to talk to some SWEs working at Cloudflare off the record in recent months and the one concensus I heard was that there was many times some tension between the boots on the ground and the decisions from senior managment but of course nothing they could do and especially after this they'll make sure to be quiet should they remain. There seemed to be a lot of pressure to deliver features and new products but quality has been left behind which means the SWEs felt pressure to deliver while also having to deal with the ensuing issues to resolve.

Either way I wish everyone affected the best and a speedy job hunt - there'll be quite a few really good people on the market now for no fault of their own.