Yesterday, Cloudflare’s stock dropped 22% when the market opened, even though the company reported strong earnings.
Revenue was up 34% compared to last year, and profits were higher than expected. It looked like a very good quarter.
But the company also said it will lay off 1,100 employees, which is about 20% of its workers.
The reason? AI can now do some of the jobs those people were doing.
Even though the business is growing, the market reacted negatively because humans are being replaced by machines.
Now look at Upwork.
Upwork’s stock fell 26%. Its revenue grew only 1.4% last year.
Many freelancers - writers, designers, and coders - depend on Upwork to find work.
But companies are no longer going to Upwork to hire people like before.
Instead, many are using ChatGPT and other AI tools to do the work.
Upwork is not just growing slowly. Its whole business model is under pressure.
These two earnings reports tell the same bigger story:
Cloudflare is using AI to reduce workers and improve efficiency.
Upwork is losing business because AI is replacing the freelancers on its platform.
One company is using AI as a tool to grow stronger.
The other is being hurt by it.
This change is no longer just an idea about the future.
It is already visible in company earnings, layoffs, and stock prices.
AI is not only changing how people work.
It is also changing how many workers companies need.