00:00 Speaker A
Coinbase gave us a taste of uh what we didn’t realize what was coming to end the week. Now we have Cloudflare cutting 20% of its humans.
00:07 Speaker B
I took a look at Cloudflare’s comments around this and it was about AI agents doing the tasks uh for employees. And even if you listen to Brian Armstrong’s uh earnings call as well from uh Coinbase, he was also talking about agentic AI and about telling managers that they should be using AI agents and that is really the theme that we’re going to be seeing going forward.
00:40 Speaker A
These tech companies are literally redesigning, rewriting job descriptions. And in some cases, these jobs no longer exist because how far technology has advanced, really, um over the past three months.
00:54 Speaker B
As and as was saying, Cloudflare is saying and particularly that the roles that they let go just aren’t the roles that are needed for the future. And as you can see on your screen, Challenger Gray and Christmas putting out this report reflecting the numbers that we saw in the month of April. There was about 33,000 job cuts in April within the tech sector alone. But then you take a look at specifically how many of those announced that they were specifically tied to AI, and that was about 26% of total cuts. It’s not just Cloudflare, it’s not just Block. There are so many others who have also announced layoffs including Microsoft, Meta, Amazon, uh Salesforce, Oracle.
01:42 Speaker C
Nobody likes to see people walking out of a building, even if they are well-paid tech executives, holding a box with their family portraits in it and their various plans. But I will say this, um, we’re certainly now looking at a potential earnings boom from a lot of these tech companies in the back half of this year. I’m looking at CloudFlare. I mean here’s a company not necessarily investing aggressively in AI infrastructure like a meta. Now laying off 20% of its workforce. I mean how it how won’t their back half EPS outlook look absolutely amazing?
02:22 Speaker D
Well, I think it will, but um, it’s interesting the reaction. I mean, you just had CloudFlare stock up there. They’re down today uh because there’s some weakness in their uh, you know, underlying business preceeding this job cut announcement. Same thing with Coinbase. There’s a difference between um these companies that might be like reacting to these uh AI job cut announcements defensively versus like last quarter when Block, you know, proactively sort of announced this huge uh job cut out of the out of nowhere when their business was doing fine and then the stock was up like 20%. And last night Kaz uh Najadia and the CEO of of Opendoor really spoke about uh how he was thinking about um AI and implementation and job cuts. He was saying like the basically the dumb companies uh right now are just going to think about adopting AI to to do the same workflows that this company has already done. And what he said the smart companies were doing were totally trying to rethink their internal processes. I think those are the companies that are going to be rewarded going forward.