Cybersecurity provider Cloudflare is set to cut around 20% of its global workforce as it reshapes operations around the growing use of artificial intelligence tools.
The company said the restructuring will affect more than 1,100 employees worldwide. Cloudflare had 5,156 full-time employees at the end of 2025.
The decision was announced to staff in an internal email from cofounders Matthew Prince and Michelle Zatlyn. In the note, the duo said Cloudflare was redesigning teams and operations for what they called an “agentic AI era”.
The founders said the company’s internal use of AI tools has increased more than sixfold over the past three months, leading to major changes in the way employees work.
“Today’s actions are not a cost-cutting exercise or an assessment of individuals’ performance,” the founders added. “They are about Cloudflare defining how a world-class, high-growth company operates and creates value in the agentic AI era.”
“By embracing an agentic AI-first operating model, Cloudflare will be even faster and more innovative as we continue to help build a better Internet,” Prince told The Wall Street Journal.
The internet infrastructure and cybersecurity company expects to record charges of $140-150 million related to the layoffs during the second quarter.
AI toll
Cloudflare is the latest tech company to announce layoffs linked to the rising adoption of AI-powered business tools. This week, other companies, including Coinbase and Freshworks, also revealed workforce reductions while pointing to AI-driven operational changes.
Freshworks said it would reduce 11% of its global workforce, impacting nearly 500 employees, while Coinbase plans to cut 14% of its staff.
Data from Layoffs.fyi showed that 101,550 employees have been laid off across 120 technology companies so far.
Alongside the layoffs announcement, Cloudflare also released its first-quarter earnings results. The company posted a loss of $22.9 million, improving from a loss of $38.5 million in the same period last year.
Revenue rose to $639.8 million from $479.1 million a year earlier, beating analyst expectations of $620.8 million, according to WSJ.
For the second quarter, Cloudflare forecast revenue between $664 million and $665 million, slightly below analysts’ estimate of $665.3 million based on LSEG data. The company expects adjusted earnings of 27 cents per share, matching market expectations.
Despite reporting stronger-than-expected quarterly results, Cloudflare shares fell around 19% in extended trading. It had closed up 3.3% at $256.79 on the Nasdaq on Thursday.
