Chamath Palihapitiya Rips Into Cloudflare CEO's Layoff Memo: 'I Think You Did A Horrible Job'

• The billionaire venture capitalist added that Prince’s “measurer” label would not help employees laid off by Cloudflare when they try to seek a new job.
• Palihapitiya also had a message for technology company CEOs, saying there are enough chiefs like Prince who have now gone public with statements like these.
• He advised tech CEOs to get behind their desks and do their jobs, while adding that if they need to manage something, just manage it, instead of writing these memos.

Chamath Palihapitiya ripped into Cloudflare Inc. (NET) CEO Matthew Prince's layoff memo, arguing that it effectively placed a "scarlet letter" on employees affected by the company's recent layoffs.

“The reality is that, if this is the way that you're going to message something as critical as this, I think you did a horrible job,” Palihapitiya said during a recent episode of the All-In podcast.

Cloudflare shares were up nearly 2% in Tuesday morning’s trade.

Employees Reduced To A Label, Says Palihapitiya

Palihapitiya argued that Prince's memo reduced employees to a label. He said Prince couldn't have written a worse memo, pointing to the CEO's decision to label certain employees as "measurers." The billionaire venture capitalist added that this label would not help employees laid off by Cloudflare when they try to seek a new job.

“You reduce humans to a label called ‘the measurer,’ and then you're like, ‘I'm going to lay off all the measurers,’” he added.

Palihapitiya’s Advice To Tech CEOs

Palihapitiya also had a message for technology company CEOs, saying there are enough chiefs like Prince who have now gone public with statements like these.

“You can hear them, you can understand them. And I think what we're learning is, man, they're really good at one thing, and they're not necessarily as good at all the other things,” he said.

He advised tech CEOs to get behind their keyboards and do their jobs, while adding that if they need to manage something, just manage it, instead of writing these memos.

“You're terrible at it, all of you. You suck at this,” he added.

What Did Prince Say?

Prince stated in an opinion piece for The Wall Street Journal last week that employees generally fall into three categories: builders who create products, sellers who drive revenue, and "measurers" who handle functions such as finance, legal, compliance, and operations.

He said advances in AI would make builders even more productive and would not replace sellers, since customers still prefer human relationships and trust.

However, Prince warned that AI is likely to have the biggest impact on "measurers," whose work he believes is more susceptible to automation.

“The vast majority of those we laid off last week were measurers. We cut middle managers across the organization because AI allows us to have more direct reports per manager while still measuring and mentoring our teams effectively,” he said.

The Workforce Reduction

Prince’s memo came two weeks after Cloudflare reduced its workforce by more than 20%, laying off over 1,100 employees globally.

“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,” the company stated.

Cloudflare added that its usage of AI has surged more than 600% over the previous three months, while noting that employees across functions run thousands of AI agent sessions every day to get their work done.

How Did Retail Investors React To NET?

Retail sentiment on Stocktwits around Cloudflare trended in the ‘bearish’ territory at the time of writing.

NET stock is up 12% year-to-date and 39% over the past 12 months. The Vanguard Total Stock Market Index Fund ETF (VTI) is up 29% over the past 12 months, while the Vanguard Information Technology Index Fund ETF (VGT) is up 58%.

Also See: BRAI Stock Explodes 159% Today – AI PropTech Company Unlocks $33B Opportunity With New Deal

For updates and corrections, email newsroom[at]stocktwits[dot]com.