workforce – Scott Loftesness

The Tipping Point Was Last November

Matthew Prince, Cloudflare’s CEO, said something on today’s earnings call that I keep turning over. He didn’t bury it or soften it. He named a date.

“Internally, the tipping point was last November.”

That’s a specific thing to say. Not “we’ve been on a journey” or “AI has been transforming our industry.” A month. A moment. The thing changed, and he knows when.

What changed, by his account, is that Cloudflare’s teams began seeing productivity gains so dramatic they were hard to describe — people who were two times more productive, ten times, in some cases a hundred times. “It was like going from a manual to an electric screwdriver.” Usage of AI tools internally is up more than 600% in just the last three months. Every line of production code is now reviewed by an autonomous AI agent.

And then he said goodbye to 1,100 people — about 20% of the company.

Today wasn’t just Cloudflare. Earnings season has become something like a drumbeat. Meta is cutting 8,000 employees this month. Amazon cut 16,000 in Q1. Oracle eliminated roughly 30,000 to fund AI infrastructure. Block cut almost half its workforce. PayPal is reportedly planning to cut 20% of its staff over the next few years. Coinbase cut 14%. Snap cut 16%. As of this week, more than 92,000 tech workers have been laid off in 2026 alone.

The scale is striking. But what strikes me more is the framing — the specific language being used to describe what’s happening. These aren’t being announced as cost-cutting moves or post-pandemic corrections, the way they might have been in 2022. They’re being announced as architectural decisions. Structural adaptations. Evolution.

Prince was careful to be explicit: “This isn’t a cost-cutting exercise or an assessment of individuals’ performance. It’s about defining how a world-class, high-growth company operates and creates value in the agentic AI era.” That’s not empty corporate language, or at least not only empty corporate language. The distinction he’s drawing — between trimming fat and reimagining how a company is built — maps to something real about what AI agents can now actually do.

There’s a legitimate version of this argument and a convenient one, and they’re being delivered in the same sentence by the same people, which makes them hard to separate. Some analysts suspect companies are using AI as cover for cuts they wanted to make for other reasons — rightsizing from pandemic-era overhiring, funding massive infrastructure buildouts, chasing margin. Oxford Economics flagged this: maybe some firms are “dressing up layoffs as a good news story.” The cynicism is warranted.

But then there’s the Cloudflare number: 600% increase in AI usage in three months. That’s not a narrative. That’s a measurement.

What’s different about this moment — what makes Prince’s “tipping point” language feel accurate rather than convenient — is that the people making these decisions are themselves users of the tools. They’ve seen the productivity numbers internally before anyone else has. They’re not theorizing about what AI might do to their workforce; they’re describing what it already did.

That’s the thing that changed. For years, AI’s labor impact was a future tense conversation. Economists studied it, think pieces warned about it, conferences debated the timeline. Then, somewhere around last November apparently, a cohort of technology companies crossed from hypothetical to empirical. The future tense became past.

Whether you read that as tragedy, as transformation, or as both depends on where you’re standing. 1,100 people at Cloudflare today are standing somewhere very specific. Prince acknowledged this with what felt like genuine difficulty: “A number of friends will no longer be colleagues.” Whether that difficulty changes anything material for the people leaving is a fair question.

But the acceleration itself — the thing he named — is real. The tipping point was last November. And if it was last November for Cloudflare, it was some nearby month for Amazon, for Meta, for Block, for all of them. Whatever these companies learned that changed everything, they all seem to have learned it around the same time.

That’s what I find myself sitting with today: not just the scale of the disruption, but the synchrony of it. The realization arrived, and then the decisions followed. Quietly at first, then all at once.

Why IBM is Hiring Beginners

There is a pervasive anxiety humming beneath the surface of the modern workplace—a quiet, collective fear that the bottom rungs of the corporate ladder are being systematically sawed off by artificial intelligence.

The common wisdom, echoed in countless op-eds and boardroom whisperings, is that entry-level jobs are the natural prey of the Large Language Model.

The tasks of summarizing, drafting, formatting, and basic coding are easily consumed by algorithms. If a machine can execute the rote labor of a junior analyst in three seconds, why hire the junior analyst at all?

It is a seductive, mathematically appealing logic, especially in an era of tightening belts and efficiency mandates.

Consequently, we are witnessing a landscape where many tech companies are quietly, or sometimes loudly, slashing their junior roles to lean on AI.

But amidst this trend, an alternative approach emerges that feels almost rebellious in its long-term optimism.

IBM, a legacy titan that has weathered every technological revolution of the past century and where I started my career, is leaning entirely the other way. Rather than cutting, they are reportedly tripling their entry-level hiring.

Reflecting on this strategy, IBM’s chief HR officer noted:

“The companies three to five years from now that are going to be the most successful are those companies that doubled down on entry-level hiring in this environment.”

This perspective is profound because it challenges the very premise of what an entry-level employee actually is.

The prevailing, perhaps cynical, view treats a junior worker merely as a unit of basic output. If you view a beginner only as a spreadsheet compiler or a draft-writer, then yes, they appear redundant in the face of AI.

But what if we view the entry-level role not as a terminal function, but as an apprenticeship?

When we hire a beginner, we aren’t just buying their immediate, unpolished labor. We are investing in a trajectory.

We are bringing them into the fold so they can absorb the tacit knowledge of the organization—the unwritten rules, the cultural nuances, the complex, human art of navigating institutional friction.

An AI cannot learn the subtle interpersonal dynamics of a specific team, nor can it develop the intuition that comes from failing, recovering, and being mentored by a seasoned veteran.

If we automate away the entry-level, we effectively destroy the incubator for our future mid-level and senior leaders. Where will the experienced managers of 2030 come from if no one is allowed to be a beginner in 2026? You cannot suddenly parachute someone into a senior role and expect them to possess the deep, intuitive judgment that is only forged in the crucible of early-career trial and error.

The institutional memory breaks down.

IBM’s strategy recognizes a crucial reality: AI shouldn’t replace the beginner; it should accelerate them.

Imagine a junior employee who isn’t bogged down by mindless grunt work, but instead is handed the tools to instantly bypass the mundane. They can spend their foundational years analyzing, questioning, and engaging in higher-order problem-solving alongside their mentors. They transition from data-gatherers to hyper-learners.

By doubling down on human potential in an age of artificial intelligence, companies are making a strategic bet on the one asset that cannot be replicated by a server farm: the evolving, adapting, and deeply creative human mind.

The most successful organizations of the near future won’t be the ones with the fewest employees and the most algorithms; they will be the ones that used algorithms to cultivate the most formidable, deeply experienced human talent.

The ladder hasn’t been dismantled. It has merely been redesigned.

The only question is whether we have the foresight to keep inviting people to climb it.

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