BNP Paribas analysts recently discovered a striking contradiction. Even though Cloudflare cut 20% of its workforce earlier this year, the tech company’s engineering division has skyrocketed.
Cloudflare hired 1,308 engineers in December. That figure rose by 45% to 1,894, according to data collected by BNP from LinkedIn.
When I crunched the numbers beyond Cloudflare CEO Matthew Prince, he confirmed this trend. So why are companies cutting so many jobs while hiring more engineers? His answer reflects how AI is changing the structure of companies across the technology industry, and potentially beyond.
Prince’s first point is that AI will not take away technology jobs. That’s supported by other data. According to technology job market TrueUp, the number of open technology jobs being filled by technology companies has increased by 14% so far this year. Open hardware engineering positions increased by 52%.
Instead, AI is changing the jobs that companies value most.
Prince says most modern companies are made up of three broad groups: builders, distributors, and measurers. Builders create products. A seller persuades a customer to buy a product. Measurers track, audit, manage, report, and adjust the business.
According to Prince, builders are safe in an AI world. In fact, he said, if AI makes Cloudflare’s builders (engineers) much more productive, the company will hire more people.
Sellers also remain essential, as customers still want to buy from people they can trust, who understand their problems, and who can solve them.
Mr. Prince said that as this new technology handles these functions continuously and thoroughly, it is the measurer who loses the pivot of AI. Most of Cloudflare’s job cuts earlier this year focused on the following measurement roles:
- The operation was reduced to a single group.
- Finance has been consolidated with increased automation.
- Like many companies, the marketing department was cut because the department had a large number of measurement people, the CEO said.
The result is less people keeping track of things and more investment in the people actually doing the core work of building the business.
This is a healthier reset than most of AI’s doomsaying predictions. Even if it is cold comfort to those caught up in the transition.
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