Cloudflare just emailed 1,100 people their layoff notices.
.webp)
20% of the workforce. Gone. Reason given: restructuring for the “agentic AI era.”
Let me translate.
Q1 2026 revenue: $639.8M, up 34% year over year. This is not a struggling company. This is a growing one.
Same announcement: plans to hire 1,111 interns in 2026. One intern for every laid-off employee. Cute math.
This isn’t cost-cutting
Google Pilots AI-Assisted Software Engineering Interviews, Reflecting Industry Shift
What's Changing in the Interview Process
- Prompt engineering effectiveness
- Output validation and critical evaluation
- Debugging and iterative refinement skills
Why the Shift Now?
Additional Interview Updates
- Googleyness and Leadership Round: Traditionally focused on behavioral questions, this segment will now include a technical design discussion centered on a candidate's past projects.
- Junior Candidate Track: One traditional technical round will be replaced with an open-ended engineering challenge, emphasizing problem-solving approach over rote implementation.
- Pilot Scope: Initial testing will occur across several organizations, including Google Cloud and the Platforms & Devices unit.
Industry Context: AI in Hiring Is Gaining Momentum
What This Means for Candidates
. It’s a swap. Experienced talent out, cheap labor and AI agents in. The buzzword is the cover story.
Matthew Prince said he sent the email himself because it “didn’t feel right” any other way. Translation: 1,100 managers delivering 1,100 separate firings was worse optics than one mass send.
If you work in tech, here’s what this actually means:
→ Profitability and growth no longer protect your seat. The AI-first restructuring narrative gives every CEO permission to cut, regardless of performance.
→ “Agentic AI” is the new “synergy.” Watch for it on earnings calls. It precedes the layoff.
→ Your leverage now lives in skills AI can’t replicate yet — and in income streams your employer doesn’t control.
The agentic era isn’t coming. It’s here. The question is whether you’re building for it or waiting for the email.
Layoffs fell 50% from the first third of 2025 to the first third of 2026 — with one glaring exception. Tech was hit the hardest, laying off more than 85,000 workers in the first four months of the year, according to a new report out Thursday from Challenger, Gray & Christmas. That's a 33% jump year-over-year. The main culprit? Artificial intelligence, which was the top-cited reason for the second month in a row. A separate release from the Labor Department showed continuing unemployment claims hit a two-year low last week.
Tech companies are cutting jobs…more than other industries.
New Challenger, Gray & Christmas, Inc. data showing:
❗️Tech job cuts are +33% in 2026, reaching 85,411
vs
❗️Total job cuts -50% in 2026, reaching 300,749
This is a stark contrast across US-based employers.
And for a second straight month, *AI* is the main culprit - with companies blaming it for 26% of cuts.
But when taken in 2026, AI only accounts for 13% of job cuts plans, according to Challenger…and even less since they started tracking it as a reason back in 2023.
“Market and Economic Conditions” is still the main reason for job cuts YTD.
Look - ‘AI washing’ is clearly a concern. It’s easier for an exec to blame the need for tech and innovation than to blame their own mismanagement or other pressures.
But there’s also data to counter the AI anxiety.
Maybe AI is boosting roles - take the European Central Bank March report showing AI-intensive firms are hiring more people, not firing them.
So lmk your take on the AI impact on the labor market.
Is the tech sector a leading indicator? Or an outlier?
Generative AI is replacing jobs in the companies closest to where generative AI is being developed. This isn't a surprise – but what matters more is the triple-whammy that the tech industry has faced over the past four years. You need all three causes to explain the dramatic drop in employment.
The chart below shows how one of the biggest categories of employment in tech has evolved since 1990. Each point is difference from the previous peak in employment. The dotcom bust was a huge dip; the Great Recession and the Covid-19 pandemic were smaller ones. What we've seen over the past four years has been the deepest decline since the early 2000s.
Tech hiring got a huge boost after the initial shock of the pandemic. Because people couldn't leave their homes to buy services, they shifted their spending to e-commerce and virtual experiences. Tech leaders hoped this would be a permanent change, not just a temporary shift, and hired accordingly. They were also buoyed by rock-bottom interest rates, which made the cost of capital negligible.
All of that started to change in 2022. The Federal Reserve raised interest rates more steeply than at any time in recent history, and the service economy reopened as pandemic-era restrictions fell away. Tech companies had overhired and started to shed workers.
In the midst of this, the generative AI revolution was picking up speed. Facing lower revenues and a higher cost of capital, tech companies were eager to find new ways to economize. So it wasn't just their proximity to generative AI that drove the change; they were among the most desperate to use it in hopes of surviving their budgetary challenges.
Put the three causes together – lower demand, higher rates, and a new productivity tool – and you have a recipe for massive destruction of jobs. And this is why it's not happening to the same degree in other occupations, like administrative work. We're still seeing job losses there, but the triple-whammy isn't present to the same extent.
Generative AI is already creating jobs, too – just look at all the newly minted AI companies recruiting on this website! But these forces rarely move in lockstep. For now, the disruptions and dislocations will continue.
AI is reshaping the manager's job description and, in some cases, eliminating it entirely, Business Insider reports. Coinbase CEO Brian Armstrong recently declared there would no longer be "pure managers" at the company, while Block's Jack Dorsey and Snap's Evan Spiegel are pushing toward leaner, AI-powered teams where managers are expected to contribute directly. The trend reflects a broader flattening of corporate hierarchies: Job listings for middle managers dropped more than 12% in 2025, while those who remain are overseeing more employees than in previous years.
McDonald’s posted better-than-expected sales in the first quarter but said high gas prices and consumer anxiety over the Iran war could dent sales this spring.
The average price of a gallon of gas in the U.S. was $4.55 on Thursday, according to AAA. That was 44% higher than a year ago.
McDonald’s Chairman and CEO Chris Kempczinski said the company has been making progress bringing lower-income customers back into its stores with value meals. But fast food visits by customers with household incomes of $45,000 or less are still declining overall, and the spike in gas prices won’t help, he said.
“Clearly, when you have elevated gas prices... that is going to disproportionately impact low-income consumers. And so we expect the pressures there are going to continue,” Kempczinski said Thursday during a conference call with investors.
McDonald’s said same-store sales, or sales at locations open at least a year, fell in the U.S. and some international markets in April. That was partly due to a big surge in sales last April, when a popular Minecraft meal drove traffic. Kempczinski said it’s too early to get a read on sales in May and June, although the company is hoping a new beverage lineup which launched in the U.S. this week will generate interest.
“Certainly consumer sentiment is heightened anxiety, let’s just say, and it may have an impact. But, you know, our focus is on controlling what we can control,” Kempczinski said.
McDonald’s shares were flat in early trading Thursday.
In the January-March period, McDonald’s global same-store sales rose 3.8%. That was better than the 3.7% increase Wall Street was expecting, according to analysts polled by FactSet.
The company kept customers interested with limited-time menu items like the Big Arch burger, a 1,020-calorie behemoth that went on sale in the U.S. in March. The burger became a viral sensation after Kempczinski posted a video of himself taking a nibble from one and was mocked for his tentative bite. Tom Curtis, president of rival Burger King, posted his own video taking a vigorous bite of his chain’s new Whopper.
The Big Arch burger costs well over $8 in many U.S. markets. So McDonald’s is trying to emphasize value in other parts of its menu. The company cut prices on some U.S. combo meals in September, and starting April 21, McDonald’s U.S. stores began offering 10 items that each cost less than $3.
Kempczinski said McDonald’s experience in other markets like Germany and Australia has shown that the combination of meal deals and low-priced individual items is the best value strategy.
“You need to have a meal deal offering there to be able to drive interest and excitement around some of our core menu items,” Kempczinski said. “But you also need entry-level price points for those folks who are maybe a little bit more stressed around affordability and are looking for, you know, ‘What can I get for $3 or less?’”
The Chicago chain said its revenue rose 9% in the first quarter to $6.52 billion. That was also higher than the $6.47 billion Wall Street was expecting, according to FactSet.
McDonald’s net income rose 6% to $1.98 billion. Adjusted for one-time items, the company earned $2.83 per share. That was also higher than analysts’ forecast of $2.74.
A federal court ruled Thursday against the new global tariffs that President Donald Trump imposed after a stinging loss at the Supreme Court.
A split three-judge panel of the Court of International Trade in New York found the 10% global tariffs were illegal after small businesses sued.
The court ruled 2-1 that Trump overstepped the tariff power that Congress had allowed the president under the law. The tariffs are “invalid″ and “unauthorized by law,” the majority wrote.
The third judge on the panel found the law allows the president more leeway on tariffs.
If the administration appeals Thursday’s decision, as expected, it would first turn to the U.S. Court of Appeals for the Federal Circuit, based in Washington, and then, potentially, the Supreme Court.
At issue are temporary 10% worldwide tariffs the Trump administration imposed after the Supreme Court in February struck down even broader double-digit tariffs the president had imposed last year on almost every country on Earth. The new tariffs, invoked under Section 122 of the Trade Act of 1974, were set to expire July 24.
The court’s decision directly blocked the collection of tariffs from three plaintiffs — the state of Washington and two businesses, spice company Burlap & Barrel and toy company Basic Fun! “It’s not clear’’ whether other businesses would have to continue to pay the tariffs, said Jeffrey Schwab, director of litigation at the libertarian Liberty Justice Center, which represented the two companies.
The ruling marked another legal setback for the Trump administration, which has attempted to shield the U.S. economy behind a wall of import taxes. Last year, Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA) to declare the nation’s longstanding trade deficit a national emergency, justifying sweeping global tariffs.
The Supreme Court ruled Feb. 28 that IEEPA did not authorize the tariffs. The U.S. Constitution gives Congress the power to establish taxes, including tariffs, though lawmakers can delegate tariff power to the president.
Dave Townsend, a trade lawyer at Dorsey & Whitney, said the ruling will open the door for more companies to request that the tariffs be thrown out and that any payments they’ve made be refunded.
“Other importers likely will now ask for a broader remedy that applies to more companies,” Townsend said, though he cautioned the case could also reach the Supreme Court.
Trump is already taking steps to replace the tariffs that were struck down by the Supreme Court in January. The administration is conducting two investigations that could end in more tariffs.
The Office of the U.S. Trade Representative is looking into whether 16 U.S. trading partners — including China, the European Union and Japan — are overproducing goods, driving down prices and putting U.S. manufacturers at a disadvantage. It is also investigating whether 60 economies — from Nigeria to Norway and accounting for 99% of U.S. imports — do enough to prohibit the trade in products created by forced labor.