BNP Paribas analysts recently identified a notable inconsistency. Although Cloudflare reduced its workforce by 20% earlier this year, the company's engineering team has grown substantially.

Cloudflare had 1,308 engineers in December. This number has risen to 1,894, marking a 45% increase, based on LinkedIn data analyzed by BNP.

When I discussed these figures with Cloudflare CEO Matthew Prince, he verified the pattern. The question arises: why cut numerous positions while increasing engineering hires? His response highlights how AI is reshaping company structures in the tech sector and possibly elsewhere.

Prince's initial observation: AI is not eliminating tech jobs. This aligns with additional information. Tech companies have posted 14% more open roles this year, per TrueUp, a tech employment platform. Hardware engineering positions have increased by 52%.

Rather, AI is altering the types of roles that companies prioritize.

Prince describes three main categories in contemporary firms: builders, sellers, and measurers. Builders develop products. Sellers convince customers to purchase them. Measurers monitor, review, oversee, document, and organize operations.

Builders are safe in an AI-driven environment, Prince noted. Moreover, if Cloudflare's engineers gain significant productivity from AI, the company plans to expand their numbers further.

Sellers continue to be vital since clients prefer dealing with trusted individuals who grasp their issues and provide solutions.

Measurers face the biggest impact from AI, according to Prince, as the technology manages these tasks more consistently and comprehensively. Cloudflare's recent layoffs primarily targeted measuring positions:

Middle managers were eliminated.

Operations were streamlined into one team.

Finance processes were integrated with increased automation.

Marketing staff were reduced, as this area often contains many measurers, the CEO explained.

Consequently, there are fewer employees focused on oversight and greater resources directed toward core activities that build the enterprise.

This represents a more positive adjustment compared to many pessimistic AI forecasts, though it offers little solace to those affected by the changes.