Billionaire American venture capitalist and entrepreneur Chamath Palihapitiya didn’t mince words, ripping into Cloudflare CEO Matthew Prince’s layoff memo, which explained the rationale behind firing 1,100 employees.
The California-based technology company’s recent round of layoffs reduced its global workforce by 20%. As Palihapitiya sees it, the US company’s CEO went on to “reduce” employees to a “label” in his subsequent memo release, as if the job cuts announcement wasn’t already devastating enough.
Further slamming Prince’s choice of words during a recent episode of the ‘All-In’ podcast, US President Donald Trump’s vocal ally said, “The reality is that, if this is the way that you’re going to message something as critical as this, I think you did a horrible job.”
Trump ally rips into Cloudflare CEO for reducing employees to a label
During a conversation on their business podcast, co-hosts Jason Calacanis and Chamath Palihapitiya brought up how Cloudflare boss Matthew Prince very insensitively said that he was “getting rid of measurers.”
“Measurers are the people who manage people and who measure data. They’re unnecessary because of AI,” Calacanis said on the new episode of the podcast this week. Palihapitiya, who famously re-positioned himself as a prominent Donald Trump megadonor after pledging allegiance to the Democratic Party, replied, “I thought the Matthew Prince note was horrible. This was, like, from the PR School of Re**rds.”
Canadian-American entrepreneur said, “You reduce humans to a label called ‘the measurer,’ and then you’re like, ‘I’m going to lay off all the measurers.’”
Reiterating that Prince did a “horrible job” by not just labeling employees, but also putting a “scarlet letter on their back,” Chamath noted that the move was possibly going to torment the laid-off staffers for a long time.
“Now you label these people, and you put a scarlet letter on their back, so now when they try to get a different job, they’re like, ‘Oh, you’re one of the Cloudflare measurers?’ How does that help anybody?” the venture capitalist went on.
Dropping the “F-bomb,” Palihapitiya continued targeting Matthew Prince, urging him to “get behind the keyboard” and just do his job. As his verbal attacks against the Cloudflare CEO dragged on, the South Asian-origin billionaire even collectively took a dig at “tech CEOs that are now public.”
Drawing up a character sketch, he said, “I think what we’re learning is, man, they’re really good at one thing, and they’re not necessarily as good at all the other things.” Sending out a message to tech companies’ leadership, he insisted CEOs stick to their jobs and not “write these missives,” referring to Prince’s layoff memo.
What was in Cloudflare CEO Matthew Prince’s layoff memo?
The Cloudflare CEO is not the only company leader to have issued such a piece of communication to employees after a sizeable layoff in recent times. Following the now-infamous May 20th job cuts at Meta that affected 8,000 employees, Mark Zuckerberg also sent out a similar message to staffers, underscoring the company’s transition amid the rising AI-first trend in the tech landscape.
A May 7 blog post on the Cloudflare website, titled “Building for the future,” disclosed the contents of an email that was sent to the company’s global team.
Read the layoff memo sent out by Cloudflare CEO Matthew Prince and COO Michelle Zatlyn:
“Team:
We are writing to let you know directly that we’ve made the decision to reduce Cloudflare’s workforce by more than 1,100 employees globally.
The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere.
Today is a hard day. This decision unfortunately means saying goodbye to teammates who have contributed meaningfully to our mission and to building Cloudflare into one of the world’s most successful companies. We want to be clear that this decision is not a reflection of the individual work or talent of those leaving us. Instead, we are reimagining every internal process, team, and role across the company. Today’s actions are not a cost-cutting exercise or an assessment of individuals’ performance; they are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era.
This is a moment we need to own as founders and leaders of the company. Matthew has personally sent out every offer letter we’ve extended. It is a practice he has always looked forward to because it represented our growth and the incredible talent joining our mission. It didn’t feel right for this message to come from anyone other than the two of us. Rather than trickling out notices through managers, we will be sending emails to every employee.
Within the next hour, every member of our global team will receive an email from both of us clarifying how this change affects them. For those departing today, we will send this update to both their personal and Cloudflare addresses to ensure they receive the information immediately.
It’s important to us that we treat departing team members right and in a way that exceeds what we’ve seen from other companies. We believe acting with empathy isn’t about avoiding hard decisions but rather about how you treat people when those decisions are made. If we are asking our team to be world-class, we have a reciprocal obligation to be world-class in how we treat them. We are pairing the directness of these measures with severance packages that lead the industry. The packages for departing employees will include the equivalent of their full base pay through the end of 2026. Healthcare coverage is different across the globe, and if you’re in the United States, we’ll continue to provide support through the end of the year. We are also vesting equity for departing team members through August 15th, so they receive stock beyond their departure date. And, if departing team members haven’t hit their one-year cliffs, we are going to waive those and vest their pro-rated equity through August as well.
We’ve asked the team to do this only once, as hard as that may be today. We don’t want to do it again for the foreseeable future. By taking decisive action now, we provide immediate clarity to those departing and protect the stability of the team that remains. We are making these changes now because making smaller, repeated cuts or dragging a reorganization out over multiple quarters creates prolonged emotional uncertainty for employees and stalls our ability to build. It’s the right thing to do; it’s the honest thing to do; and it reflects the values of the company we are continuing to build.
Cloudflare started as a digitally native company built in the cloud. That allowed us to catch up to and pass companies that had a head start of years or decades but were slowed down by outdated systems and processes. As we’ve now become the leader, we cannot rest on the workflows and organizational structures that worked yesterday. We’re confident that our reshaped organization will be even faster and more innovative as we continue building the future.
To those departing us: you’ve helped build the strong foundation Cloudflare stands on today. We have the utmost respect for your work and gratitude for the impact you have made. We’re confident you will land at other great places and build many future great companies, bringing with you a unique set of skills learned while building Cloudflare.
Transparency is a core principle at Cloudflare, and it was important that you hear this from us first. We will be heading to our earnings conference call at 2 PM PT, when we’ll share more. We also plan to address today’s announcements live with the team at our all-hands meeting.
It’s not an easy day, but it’s the right decision. Our mission to help build a better Internet is more important now than ever, and there’s a lot of work left to be done.“
Cloudflare CEO’s op-ed after layoff memo
Prince wasn’t done after sending out the layoff emails. About a week ago, he decided to share with the world how he had chosen “Which Cloudflare Employees to Replace With AI” in an opinion piece he wrote for The Wall Street Journal.
Therein, he confirmed that he didn’t lay off more than 20% of the company’s workforce because Cloudflare was “struggling.” Instead, he boasted, “We posted record revenue growth, have strong free cash flow, and are adding an unprecedented number of customers around the world.”
Prince further explained that he chose to fire 1,100 people because “business is changing, and to win the future,” his company “needs to change with it.” His message mirrored Zuckerberg’s admissions in his own memo, in which the Meta CEO called AI “the most consequential technology of our lifetime,” affirming that the decision to lay off 8,000 people was necessary as “success isn’t a given” in the competitive job market, as quoted by CNBC.
In an effort to manage the discomfort sustained by those who took a major blow after the layoff announcement, Zuckerberg directly acknowledged the human cost of the new changes, saying, “It’s always sad to say goodbye to people who have contributed to our mission and to building this company. I feel the weight of that.”