Cloudflare lays off new hires (opens in new tab)

> I don't understand why Cloudflare can't just be honest and say the reason she got laid off, instead of making up some garbage about her performance.

In the video she says she was hired August 25th, or 4.5 months ago.

She also says she hasn't "closed anything officially", or in other words zero sales.

I understand this is an emotionally charged topic, but the unfortunate reality is that being past your ramp-up period with zero sales is not a good place to be when a company is downsizing. I feel very sorry for her, but I also don't think it's entirely fair to conclude that performance wasn't a factor.

It's also not really fair to conclude that Cloudflare was withholding information when the call starts at 0:26 and she cut's them off with "I'm going to stop you right there" at 0:47 (21 seconds later). They offer to schedule a followup call to go over the details, but she was in such a rush to talk over them and start lodging accusations before they had a chance to talk that I can't blame them for trying to de-escalate on the call.

"In past years your performance would have been sufficient to give this more time. But conditions have changed and we're letting X% go today. So we need to make very imperfect judgements for those who are new, unfortunately including you. This isn't a definitive verdict on your abilities — instead it's the best we can do with the limited data we have."

...would have gone a long way here.

It makes sense it's a surprise — they've likely been operating in more relaxed conditions — but then things change, the bar rises dramatically. Not sure why they don't just say that. It should be an _easier_ message to deliver if they can say that it's a noisy measurement because she's new...

What does it matter? If they say they overhired, you have people in here asking why the CEO (or the board) doesn't get fired for that decision. If they say their investors are demanding better returns (e.g. higher stock price, higher profits, wahtever that means for the particular business) you have people in here saying it's greed.

There is no answer Cloudflare could give her or anyone else that would make folks go "oh, ok, I get it. Thanks!" So why even bother giving one?

That video. The firedee did a good job on the call, considering, IMHO. (Posting the video is a different question, and hopefully won't come back to bite her, legally or professionally.)

On the corporate side of the call, it's exactly what you'd expect. From a stereotypical big stodgy corporation that totally doesn't care. Just having the executioners follow a script, and fall back to usual corporate politic language.

I think it complicates matters with her being in sales. It’s a much more cutthroat area in companies the size of Cloudflare from what I’ve seen. If you don’t perform you get cut loose really fast. I have a family member in tech sales and it blows my mind how easy it is to get fired.

I can't edit the main post, so I'll add here: apparently the reason they refuse to give her a non-performance related reason is so they don't have to pay out unemployment benefits. Makes total sense, and is a very sleazeball tactic.

I knew someone once, in the middle eighties, who got hired, got laid off with 6 weeks severance pay a week into his tenure there, got hired a second time a week later and got fired a second time, again with severance pay. This last time it seemed to have stuck. In the first two cases the companies folded.

Under California Law (Cloudflare is HQ'd in San Francisco), she is employed "at-will." Unless covered by a union contract, she can be fired/laid off at any time for any reason, or for no reason at all.

According to such law, the company does not need to provide any information as to the reason she was terminated. However, one could argue that it would be a common and professional courtesy to give straight answers.

The only unlawful reasons were if she was terminated for violation of her civil rights based on a few protected classes, was harassed, or if she was retaliated against as part of a few protected activities (whistleblower, jury duty, labor organizing, safety comlaint).

"When an employee feels that they have been terminated, harassed or discriminated against based on their race, religion, gender, color, national origin, ancestry, disability, medical condition, marital status, age (over 40), sexual orientation or denial of family medical leave, they should contact the Department of Fair Employment and Housing at 1-800-884-1684 or at www.dfeh.ca.gov"

Text in full: https://www.dir.ca.gov/dlse/TerminationOfEmployment.pdf

For those who don't have access to tiktok here is a tweet which has the video embedded: https://twitter.com/SMB_Attorney/status/1745609324544536778

I assume this is done to dodge WARN Act requirements. I can't think of any other reasons that make any kind of sense. I mean, honestly this doesn't make sense either, it's just all I've got.

People really need to watch the TikTok video before commenting! :-)

Yikes on that second link, I seriously hope she told them she was recording the call or she may run into some two-party consent issues.

1 is the same as posted there fyi

Same here ( shares) , this was all mentioned last year around q1 on investor day for improving the sales department and firing underperformers:

https://softwarestackinvesting.com/cloudflare-net-q2-2023-ea... section: profitability

The idea, a year ago, was to replace underperformers by average performers in sales. That was the first round of layoffs that Cloudflare had and impacted ~ 100 people.

The girl in the video mentioned she didn't have a single sale. It seems consistent to me, I just hope the metric is fair.

When hiring, I'm suspicious of qualified people with low income expectations, I don't think this is a winning strategy personally and I'd take this advice with a grain of salt.

This is what I did when I entered the workforce in the fallout of the dotcom crash. I worked as an independent contractor for $35/hr ($58/hr in today's money).

Easier to pull off when you have zero salary expectation, no lifestyle to maintain or family to feed and just want to build experience.

I mean, I've been severely underpaid for a while, so my salary ask is never that high, but cost of living keeps going up on me, and I've not caught up. I'm having to deal with the interview circus (not a typo) currently and it is tiresome, if its not questions that I know don't matter in order to create a CRUD application, it's a confused HR person that passes on me for some magical reasons. It would be nice if I could get actual feedback from prospective employers, I gave you time and energy, got myself hyped for your company, only to receive no such feedback. This is the longest I've been without a job my whole life, so its quite an experience. The last time I was jobless, I had a job within a week.

I don't know, I think everyone's experience is different, and some of us are better fit for specific teams, if someone can figure out how to pair people based on how well they would fit with specific teams as opposed to what technology they all use, they would make a fortune, I can learn any obscure language in a short span of time, heck I was building a MonkeyC app for Garmin Watches within a week of being asked to work on one, a simple proof of concept in a language I had never heard of, because I liked the people I worked with, mind you I was the only one touching that language.

Are you in sales?

No matter how we try, half our salespeople keep performing worse than the median. It's intolerable.

It's the first full work week of the new year.

Smaller PR hit when bundled

They probably wanted to avoid the sharp criticism if they laid them off just before christmas... So that's all over, time for the chopping block to come out.

Why didn't they freeze hiring long before reaching the point of needing layoffs?!

Not the corporations, the Fed. The Fed introduces high correlation, compels outsized urgency and economic volatility, and directly sets unemployment targets.

I was literally in a meeting this morning where a co-worker mentioned he had reached out to Cloudflare a few days ago to ask about buying services and has not gotten a response. Certainly not a great start.

If you read the layoff threads from the last 24 hours a few common reasons are theorized

- Investors pressuring for profits, cut costs (too many people hired during Covid, total salary bill too big to justify right now). One company does it, other companies may be pressured to drive up stock prices

- Money is expensive, <1% interest rates vs 5%+ now, investors can easily get 5%, so high growth (no profit) companies aren't attractive investment targets, price falls, see previous point

- Section 174 possibly, companies can't write off entire salaries for engineers as easily to offset revenue, corporate tax bill increases. It was apparently an unexpected (people didn't expect it to pass) tax bill from 2017 that came into effect in 2022(or 23, idk)

- The sudden increase in layoffs this week could be due to a backlog over past month+ as a layoff in January looks less bad vs a layoff in December (holidays)

- Companies following the lead of other companies (CEOs not thinking for themselves, just looking at what others are doing) -- I don't think this holds, previous points make more sense

Most companies never state real motive, besides (now considered meme responses on HN?) like "we/I take full responsibility", overly generic "we over hired", or "due to (macro)economic conditions". So as far as I've seen it's mainly people guessing at the reasons.

A lot of boards want to lay people off to increase profits, but they're afraid that if they do it, the company will seem like it's failing, causing high performing employees to leave and perhaps even customers to get worried.

But once there seems to be a moment where others are laying off, they can ostensibly claim to be doing a layoff because of broad economic conditions rather than because their company is mismanaged. This means that once a layoff wave gets going, it snowballs memetically.

Of course, if it becomes big enough, it can snowball due to non-memetic reasons (laid off employees have less money, spend less, and cause economic contraction). An example would be BigCo lays off 10,000 people, which ends their Slack subscriptions, which causes Slack to lose money, which causes Slack to lay off people, which reduces their employees' spending on yoga classes, which causes yoga studios to layoff, etc.

When it comes to layoffs, no one wants to be the first company to do it, and no one wants to be the last company to do it. Once a few of the industry leaders started doing it, it gave others top-cover to start the process. At this point they need to do the layoffs so if they report bad sales numbers for the quarter they can say "we saw this coming, thats why we did some layoffs alredy. we should be good now". And if it turns out the didn't "need" to do it, they can just hire the people other companies laid off.

My feeling is that the proximate cause is a correction of the outsized growth in 2020-21. The industry collectively overshot so far that they can’t just slow hiring but actually have to lay off.

In my bigcorp I observe a pivot toward a sustainable pace of growth and significantly tighter scrutiny on costs and efficiency despite working in a growing area of the business.

I have no credentials to provide an informed opinion, but in my industry of gamedev where layoffs are currently widespread and massive, the consensus seems to be that the past 3 years saw unprecedented hiring growth due to covid etc and it has caused an otherwise "normal" consolidation cycle to be way larger. For me I think it rings true - I don't think some dark storm is coming it's just the tide going back out after a big spending spree.

I'm also interested in the responses to your questions, but I would ask something else: are non-tech companies also doing layoffs? I'm not in the US so I'm not really up to date to that.

high interest rates increase cost to service debt

I am absolutely for decoupling healthcare from employment (via universal care), and for mandated severance.

However, there's a reason that so many - I'll pick on Germany here - German tech leaders move to the US. When firing employees becomes too hard, hiring is risky, giving people broad latitude is risky, and compensation suffers because high comp is risky.

If you're a very capable software engineer, it's better to be in the US. If you're a not-very-effective one, it's better to be in a place that will make getting rid of you much harder for the business.

The harder, riskier, and more expensive you make it to hire new people, the more companies will play it safe by avoiding junior hires and putting more headcount in less restrictive countries.

A few jobs ago our mobile dev team was in an EU country with significant protections against firing people. Their interview process involved a take-home problem that would have easily taken 80-100 hours, more with polish. I couldn’t believe anyone would actually do that, but they had a long line of applicants requesting to apply. They said they couldn’t risk hiring anyone who couldn’t demonstrate that they were very good because firing them would be a huge ordeal involving lawyers, months of time, and very expensive payments if it didn’t work out.

You’re not entitled to a job. It’s a fair market. I for one would not want this kind of environment.

Healthcare is a different story.

I don't know why you're being downvoted. Strong labor protections and a generous social safety net with the goal of making it so that being fired isn't the end of the world would be a huge net positive for the labor market. Guilt free firing means you can allocate labor efficiently where it's actually needed specifically because you're not dealing with people's livelihoods.

And right now our social safety net for situations like this is built into unemployment insurance, we should expand it.

I would much rather get a risky tech job in the US than in my current country (UK) where we get paid half or even less than half..

Btw its not just the money either, imagine the kind of companies/opportunities that can survive such extreme collectivism and think about what becomes of the culture/practices/mannerisms in such an environment.

One thing I always wondered about less developed parts of the world like Asia and the middle east is how did they devolve so much? South America and Africa makes sense, those regions didn't develop complex advanced civilisations but India did, China did, Middle east did.. and they did it thousands of years ago then just devolved to pitiful lows. Now it makes sense..

Europe and her children deserves everything that coming to them. The arrogance of these people to think they can play god with humanity and be arbiter of who deserves what..

If you are working in tech, you can just save let's say quarter of your salary every month as a personal unemployment insurance and still be much better off than some dude working in EU Google office for half your salary (or even less!) with higher taxes.

Employees are equally free to "screw over" companies by terminating their employment at any time; at-will is a two-way street. That seems like a fair and faithful manifestation of a free market.

Health care and insurance is also available without an employer, at least in the US.