Cloudflare, Atlassian, Bending Spoons cut staff while growing faster

The Gist

• Cloudflare cut 20% of staff, grew revenue from 34% to 36% in two quarters
• Atlassian cut 10% of R&D, saw cloud growth accelerate and stock jump 35%
• Bending Spoons runs at $2.57M revenue per employee with 51% operating margin
• Lean teams outperform despite deep cuts in different functions

• Small teams can ship more and better, as demonstrated by Bending Spoons' Core team delivering 30+ top customer requests in 3 weeks.
• Cloudflare's layoffs focused on back-office roles streamlined by AI, sparing engineers and salespeople, leading to a 40% increase in revenue per employee.
• Atlassian's layoffs targeted R&D roles, allowing the company to invest more in AI and enterprise sales, resulting in accelerated product development.
• Bending Spoons' strategy of deep cuts post-acquisition has made mature products more profitable but is not suitable for high-growth companies.
• AI agents can handle up to 50% of back-office and marketing ops tasks, but human oversight is still essential for quality control.
• Revenue per employee is a critical metric, with top-performing B2B companies achieving $655K per employee, as per ICONIQ's 2026 Pacesetter Index.

• Evaluate back-office roles for potential AI-driven efficiencies to reduce costs without impacting customer-facing teams.
• Focus on revenue per employee as a key metric to assess operational efficiency and justify workforce decisions to the board.
• Consider strategic layoffs in R&D or back-office functions to reinvest in AI and enterprise sales for accelerated growth.
• Implement AI agents for repetitive tasks but ensure human oversight to maintain quality and handle judgment calls.

• 30+ (Top customer requests shipped by Bending Spoons' Core team in 3 weeks.)
• 20% (Percentage of Cloudflare's workforce laid off in May 2026.)
• $690K (Cloudflare's revenue per employee post-layoffs in Q2 2026.)
• 120% (Cloudflare's net dollar retention rate in Q2 2026.)
• 1 million (Monthly active users for Atlassian's MCP server and Teamwork Graph CLI in Q2 2026.)
• $655K (Revenue per employee for top-performing B2B companies in ICONIQ's 2026 Pacesetter Index.)