Cloudflare cuts 1,100 jobs despite strong earnings, citing shift to agentic AI era

Cloudflare to fire 1,100 staff whose jobs just aren't AI enough

Cloudflare has revealed it will farewell 1,100 staff, due to its current and future use of AI. In a blog post that oozes Orwellian "doublespeak," CEO Matthew Prince and President/COO Michelle Zatlyn used the headline "Building for the future" to share the email they sent to all employees. That mail opens: "We are writing to let you know directly that we've made the decision to reduce Cloudflare's workforce by more than 1,100 employees globally." The post explains, "Cloudflare's usage of AI has increased by more than 600% in the last three months alone. Employees across the company from engineering to HR to finance to marketing run thousands of AI agent sessions each day to get their work done." All that AI means "we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honor our mission to help build a better Internet for everyone, everywhere." Sackings are therefore needed, and are "about defining how a world-class, high-growth company operates and creates value in the agentic AI era." To rub salt into the wounds of sacked staff, the email went out not long before Cloudflare announced quarterly results that included 34 percent year-over-year revenue growth and guidance for 30 percent future growth. Prince opened the company's earnings call by stating "We had a very strong start to 2026." Analysts on the earnings call asked Prince to explain the layoffs and whether they will make Cloudflare stronger. "We have seen that there are roles at Cloudflare that are not the roles we need for the future," Prince responded. "Just because you are fit does not mean you cannot get fitter. Over the last six months especially, the productivity gains from the people directly talking to customers and directly creating code have been incredible, and a lot of the support roles behind them are not going to be the roles that drive companies going forward." The CEO said Cloudflare has "always lived a little bit in the future" and said the company is an early beneficiary of AI. And he said the company will keep hiring. "The people embracing these tools are so much more productive than we have ever seen before," he said. "I would guess that in 2027 we will have more employees than we did at any point in 2026, but the roles are changing dramatically, and you have to do something dramatic to make that shift." "This is not about downsizing or saving costs," Prince said. "This is about having the right people in the right roles to build the future." As is often the case these days, the email to staff warned them of a brief doomsday countdown. "Within the next hour, every member of our global team will receive an email from both of us clarifying how this change affects them," the message states. "For those departing today, we will send this update to both their personal and Cloudflare addresses to ensure they receive the information immediately." The Register imagines that went down well for workers in time zones where employees might avoid their work email outside 9-5, but sneak an early-morning-or-late-night-glance at their personal inboxes. Prince and Zatlyn told employees they hope "to do this only once" and then contradict themselves by saying they "don't want to do it again for the foreseeable future." "By taking decisive action now, we provide immediate clarity to those departing and protect the stability of the team that remains," they wrote, before adding their view that one deep cut because "dragging a reorganization out over multiple quarters creates prolonged emotional uncertainty for employees and stalls our ability to build." Firing 1,100 people is therefore "the right thing to do; it's the honest thing to do; and it reflects the values of the company we are continuing to build." ®

Cloudflare stock sinks 18% after earnings as company cuts 1,100 employees due to AI changes

A logo of Cloudflare sits outside the company's house on the opening day of the 55th annual meeting of the World Economic Forum in Davos, Switzerland, Jan. 20, 2025. Cloudflare reported first-quarter earnings Thursday that beat analysts' expectations, but shares fell 18% in extended trading as the company announced a 20% reduction in its workforce. Here's how the cloud company did versus LSEG estimates: In a blog post, the company announced that it is cutting over 1,100 employees, writing that agentic artificial intelligence has "fundamentally changed" the company's work. "This wasn't an easy decision, but it's the right decision," CEO Matthew Prince said on the earnings call, adding that there are roles at the company "that just aren't the roles that we need for the future." The company highlighted that its use of AI has increased over 600% in the last three months as it embraces "an agentic AI-first operating model."

Cloudflare cuts headcount by 20pc for leaner, AI-powered workforce

Cloudflare previously announced plans to hire more than 1,000 interns to 'ramp up' AI use. Cloudflare is cutting 20pc of its workforce after AI usage at the company grew 600pc in the last three months. The company said that it is cutting more than 1,100 employees, and expects restructuring costs to range up to $150m. Shares at Cloudflare fell by more than 16pc in after-hours trading despite the company announcing a stronger than expected quarter, with first quarter revenue growing 34pc year-on-year to nearly $640m. It expects second quarter revenue to hit between $664m to $665m. "We have to be intentional in how we architect our company for the agentic AI era", an email sent to employees read. "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." In its earnings release yesterday (7 May), Cloudflare co-founder and CEO Matthew Prince said that "AI is driving a fundamental re-platforming of the internet and a paradigm shift in how software is created and consumed - it's shaping up to be the biggest tailwind we've ever seen in Cloudflare's history." Cloudflare has offices in a number of European countries, including the UK. SiliconRepublic.com has reached out to the company for details on country-specific layoffs. The IT service provider is the latest to join a growing list of well-performing tech companies laying off human workers in preference for AI. In recent months alone, Coinbase has cut 14pc of its workforce; Meta, about 8,000 jobs; Block, 4,000 jobs; Oracle, about 10,000; Amazon, 30,000; Atlassian, 10pc of its workforce; and Snap, about 16pc - with the trend largely attributed to changing technology at the workplace. Company leaders, who were previously apprehensive of linking layoffs to AI, have recently begun embracing the shift in work culture, with Coinbase's Brian Armstrong noting AI is "changing how we work" and Meta's Mark Zuckerberg commenting that projects that previously required larger teams, now only need "a single very talented person". Block's co-founder, head and chair Jack Dorsey, meanwhile, said, earlier this year, that a "majority of companies" will reach similar conclusions around smaller teams and make similar structural changes "within the next year". Cloudflare, however, is also tapping a younger, more AI-literate workforce, with its plan to hire 1,111 interns by the end of 2026. The interns are expected to "ramp up the creative and widespread application of AI with a fresh approach", the company wrote in a blog from September. The company - which claims to support around 20pc of the web - had a turbulent final quarter last year with two major outages affecting websites across the globe. Sites and platforms such as Zoom, LinkedIn, Shopify, Canva, Substack, Coinbase, as well as X and OpenAI, were reportedly affected in the disruptions. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

Cloudflare beats on earnings, but 20% AI-driven layoffs and weak guidance send shares down

Cloudflare beats on earnings, but 20% AI-driven layoffs and weak guidance send shares down Shares in Cloudflare Inc. plunged more than 16% in late trading today after the content delivery network and security company beat fiscal 2026 first-quarter estimates but issued second-quarter revenue guidance that fell short of expectations. It also announced plans to cut about 20% of its workforce in a restructuring tied to what it called an "agentic AI-first operating model." For the quarter that ended on March 31, Cloudflare reported adjusted earnings per share of 25 cents, up from 16 cents in the same quarter of last year, on revenue of $639.8 million, up 34% year-over-year. Both figures came in ahead of the 23 cents per share and revenue of $622 million expected by analysts. Cloudflare reported a net loss of $22.9 million or seven cents a share, narrower than the $38.5 million loss it reported in the same quarter last year. Losses from operations came in at $62 million, or 9.7% of revenue, while adjusted income from operations was $73.1 million. Free cash flow rose to $84.1 million, up from $52.9 million a year earlier. Current remaining performance obligations grew 34% year-over-year, the company said, signaling continued demand from enterprise customers. The headline numbers were not what spooked investors. Cloudflare forecast second-quarter revenue of $664 million to $665 million, with the midpoint of $664.5 million below analyst expectations of about $666 million. The miss was modest in dollar terms but ran counter to expectations that the company would lift guidance after a first-quarter beat. Full-year revenue guidance of $2.81 billion to $2.81 billion came in slightly above analyst expectations of about $2.79 billion. Alongside the results, Cloudflare said it plans to reduce its workforce by approximately 1,100 people, equating to about 20% of its 5,156 full-time staff it had at the end of 2025. The company expects to incur charges of $140 million to $150 million in connection with the plan, including $105 million to $110 million in cash costs for severance, notice period and benefits and $35 million to $40 million in non-cash share-based award expense. Most of the charges are expected to hit in the second quarter, with the plan substantially complete by the end of the third quarter. Cloudflare framed the cuts as a re-architecture of the company around artificial intelligence rather than a cost-cutting move. "AI is driving a fundamental re-platforming of the internet and a paradigm shift in how software is created and consumed; it's shaping up to be the biggest tailwind we've ever seen in Cloudflare's history," co-founder and Chief Executive Matthew Prince said in the company's earnings release. The company said internal AI usage has grown more than 600% in three months, with employees across engineering, finance, marketing and human resources running thousands of agent sessions per day. The pitch did little to reassure investors, who appeared to have seen the combination of light second-quarter guidance and a 20% workforce reduction as a sign of slowing near-term growth rather than a productivity dividend.

Cloudflare employee gets laid off and reacts with surprising honesty: 'Built something meaningful, helped protect people...'

As the AI boom reshapes the tech industry, Cloudflare laid off over 1,100 employees, citing a strategic shift towards the "agentic AI era." Despite strong financial results, the company is restructuring teams and workflows to integrate AI, leading to significant operational changes and employee uncertainty about future roles and routines. The AI boom is creating excitement across the tech industry, but behind the headlines about innovation and automation is a growing wave of uncertainty for employees. Companies are rapidly restructuring teams, redefining roles, and preparing for what many executives describe as the next phase of work shaped by artificial intelligence. Amid these changes, one layoff post from a cybersecurity employee has struck an emotional chord online, not because of anger or outrage, but because of the quiet and deeply human detail at the centre of it: concern for his puppies losing their daily routine. Cloudflare employee Cayetano Antolino recently shared on LinkedIn that he had been impacted by the company's latest round of layoffs. In his post, Antolino reflected warmly on his experience at the company and said the hardest part about leaving was saying goodbye to the people he worked with. He described his teammates as intelligent, supportive, and deeply driven, adding that he was proud of what they had built together during his time there. According to him, the work felt meaningful because it involved helping protect people at scale while also allowing the team to grow professionally along the way. Rather than expressing bitterness, his post carried a surprisingly calm and reflective tone. He shared that the part upsetting him most about the transition was not the loss of the role itself, but the possibility that his next job may not be remote. That change, he explained, would affect his puppies, who had become used to midday walks, random couch breaks, and quietly appearing in the background during meetings. He added that he planned to take some time to reset, spend more time walking his dogs, and think about what comes next in his career journey this year. The post quickly gained attention online because it captured a softer side of layoffs that is often overlooked. Beyond salaries, titles, and projects, remote jobs also quietly shape everyday routines, relationships, and personal lives in ways many people only realise after losing them. He worked as a full-time Physical Security Specialist, Protective Intelligence and GSOC Lead at Cloudflare, in San Francisco Bay Area. The layoffs come as Cloudflare cuts more than 1,100 jobs while preparing for what company leadership has described as the "agentic AI era." Employees were informed about the workforce reduction shortly after the company reported strong first-quarter financial results. According to company leadership, the layoffs are not tied to employee performance or short-term financial pressure. In a message to staff, CEO Matthew Prince and co-founder Michelle Zatlyn explained that the company is redesigning teams and workflows around increasing AI integration. The company also stated that its internal use of AI tools has increased more than sixfold over the past three months, leading to major operational changes across departments. Financially, the company remains in a strong position. In the first quarter, Cloudflare reported revenue of $639.8 million, surpassing analysts' estimates of $621.9 million. Adjusted earnings also exceeded expectations, coming in at 25 cents per share compared to projected figures of 23 cents per share. The company's shares have risen more than 30 per cent so far this year. That contrast, strong financial performance alongside large-scale layoffs, has become increasingly common across the tech industry as companies race to restructure around artificial intelligence. For many employees, the fear is no longer just about company losses or downturns, but about how quickly roles themselves may change in the AI transition.

Cloudflare Stock Dives On Q1 Earnings, Company Says AI Is 'Biggest Tailwind' In History - Cloudflare (NYS

Cloudflare stock is feeling bearish pressure. Why is NET stock falling? Cloudflare Tops Q1 Estimates Q1 Revenue: $639.76 million, versus estimates of $621.87 million Q1 Adjusted EPS: 25 cents, versus estimates of 23 cents Total revenue was up 34% on a year-over-year basis. Net cash flow from operations was $158.30 million, and free cash flow came in at $84.10 million in the quarter. Cloudflare ended the period with approximately $4.16 billion in cash, cash equivalents and available-for-sale securities. "We had a very strong start to 2026. AI is driving a fundamental re-platforming of the Internet and a paradigm shift in how software is created and consumed; it's shaping up to be the biggest tailwind we've ever seen in Cloudflare's history," said Matthew Prince, co-founder and CEO of Cloudflare. NET Shares Tumble After Q2 Guidance Cloudflare expects second-quarter revenue of $664 million to $665 million versus estimates of $665.34 million. The company anticipates second-quarter adjusted earnings of 27 cents per share, which matches Wall Street estimates of 27 cents per share. Cloudflare raised its full-year 2026 revenue guidance from a range of $2.785 billion to $2.795 billion to a new range of $2.805 billion to $2.813 billion, versus estimates of approximately $2.80 billion. The company raised its full-year earnings outlook from a range of $1.11 to $1.12 per share to a new range of $1.19 to $1.20 per share, versus estimates of $1.14 per share. NET Price Action: Cloudflare shares were down 13.46% in after-hours, trading at $222.20 at the time of publication on Thursday, according to Benzinga Pro. Cloudflare investors appear to be responding negatively to the company's second-quarter guidance. Image: Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Cloudflare Lays Off 1,100 Employees Amid Major AI Restructuring

Cloudflare has laid off over 1,100 employees globally as the cybersecurity company restructures operations around AI agents and automation, calling the move a strategic shift toward the emerging "agentic AI era" rather than a cost-cutting exercise. Cybersecurity giant Cloudflare has laid off more than 1,100 employees globally. The latest job cuts mark nearly 20% of its workforce, as the company restructures around the growing adoption of artificial intelligence tools and AI agents. The firings were internally disclosed on Thursday, following Cloudflare's first-quarter earnings, which totaled $639.8 million. According to a memo from Cloudflare's founders, Matthew Prince and Michelle Zatlyn, the objective of this strategy is to prepare the firm for the 'agentic AI era.'

Bloodbath at Silicon Valley giant as CEO's savage memo to staff emerges

Cloudflare is axing more than 1,100 employees in a worldwide bloodbath as the San Francisco tech giant dramatically restructures. Founders told staff that the company's internal use of artificial intelligence has exploded more than 600% in just three months. The internet security and cloud networking firm revealed the massive cuts Thursday alongside first-quarter revenue of $639.8 million, a 34% increase from a year earlier, reported The San Francisco Chronicle. "The way we work at Cloudflare has fundamentally changed," co-founders Matthew Prince and Michelle Zatlyn told employees in a savage internal memo. "We don't just build and sell AI tools and platforms. We are our own most demanding customer," they wrote, adding that workers across engineering, HR, finance, and marketing now run "thousands of AI agent sessions each day." "That means we have to be intentional in how we architect our company for the agentic AI era," the memo, obtained by Business Insider, stated. Cloudflare insisted the layoffs were "not a cost-cutting exercise" or a reflection of employee performance, but rather part of a sweeping effort to "reimagine every internal process, team, and role across the company." The company, founded in 2009, had 5,156 full-time employees at the end of 2025, meaning the cuts amount to roughly one-fifth of its global workforce. It's unclear how many Bay Area employees would be affected. Cloudflare's founders said all employees would be notified directly by email within an hour, rather than through managers, calling the move a one-time, decisive reset designed to avoid "smaller, repeated cuts" that could drag out uncertainty. "We've asked the team to do this only once." Departing workers are being offered unusually generous severance packages, including full base pay through the end of 2026, continued US health care coverage through year's end, and equity vesting through Aug. 15 -- even for some employees who had not yet reached standard vesting cliffs. The company said it expects to take on $140 million to $150 million in restructuring-related charges, mostly tied to severance, benefits, and related costs, with most expenses landing in the second quarter. Cloudflare said the restructuring should be substantially complete by the end of the third quarter as it pushes to reshape itself into a faster, AI-first company.