Cloudflare and Arctic Wolf have become the latest vendors to downsize in the name of AI – but not everyone is sold on their motives.
Internet security outfit Cloudflare on Thursday announced it is slashing its workforce by more than 1,100 employees as it “architects” itself “for the agentic AI era”.
In a report by The Register, security operations specialist Arctic Wolf confirmed a day earlier it has laid off 250 workers in a move to position it to invest more in AI, meanwhile.
The cuts build on a trend among vendors of blaming significant downsizing moves on AI.
Justifying its cuts – which represent 20% of its workforce – Cloudflare CEO Matthew Prince and COO Michelle Zatlyn said its AI usage has increased by “more than 600% in the last three months alone”.
“We are reimagining every internal process, team, and role across the company,” they wrote in a letter to staff that was reproduced in this blog post.
“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.”
“Wrong move”
In a blog post, Jamie Lord, a Solutions Architect who works for Cloudflare partner CDS UK, called the layoffs “the wrong move”, arguing that Cloudflare’s public reasoning “does not survive five minutes of scrutiny”.
“The argument Matthew Prince and Michelle Zatlyn put forward is that AI has made the workforce so productive that the company can be smaller. If that were true, the rational move would be to hire more, not fewer,” he wrote.
“‘We are reorganising for the agentic AI era’ lands better in a press release than ‘our gross margin is going the wrong way and analysts will punish us if we miss profitability targets again’,” Lord added.
Customers and partners should be worried about where the cuts will occur considering Cloudflare has had two major incidents in the last year (including this one), Lord added.
“AI gravy train”
Arctic Wolf’s restructuring position it “to operate more efficiently, continue investing in our Superintelligence platform and Agentic SOC, and deliver strong value to customers”, a spokesperson told The Register.
But digital sustainability & GreenOps advocate Mark Butcher labelled Arctic Wolf the “latest vendor on the gullible AI gravy train”.
“Despite their being zero tangible provable ROI from AI, CEOs are still being suckered by AI vendors and their nonsense promises,” he wrote in a LinkedIn post.
Cloudflare and Arctic Wolf are by no means the first vendors to invoke AI as justification for job cuts, with CrowdStrike last summer citing the power of AI efficiencies when it announced plans to cut 500 roles.
Arctic Wolf did not respond to our request for further comment.
