Cloudflare, the San Francisco-based internet security and cloud company, announced it is laying off more than 1,100 employees worldwide. The cuts come as the company shifts to using more artificial intelligence in its daily operations. At the same time, it reported strong first-quarter revenue of $639.8 million for 2026, up 34% from the same period last year.
The job cuts affect about 20% of Cloudflareโs workforce. The company had around 5,156 full-time employees at the end of 2025. Leaders say the move is not about cutting costs due to poor performance, but about preparing for what they call the โagentic AI era.โ
Co-founders Matthew Prince and Michelle Zatlyn told staff that AI use inside the company has grown more than 600% in recent months. Employees now use AI tools across teams for coding, reviews, support, and other tasks. This has changed how the company works and requires a new structure.
Cloudflare expects to spend between $140 million and $150 million on the restructuring, mostly for severance and related costs. Most of the changes should be completed by the end of the third quarter of 2026.
Despite the layoffs, the company described the first three months of 2026 as a strong start. AI is also helping drive demand for Cloudflareโs services as more businesses use the technology. Prince called AI the biggest opportunity the company has ever seen.
Cloudflare provides services that make websites faster and safer. It has grown quickly in recent years but, like many tech firms, is now adjusting to the rapid rise of AI tools that can handle tasks previously done by people.
The layoffs were announced on May 7, 2026, alongside the quarterly results. Affected employees will receive support packages, and the company says it remains focused on long-term growth in the AI age.
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