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Cloudflare Lays Off 1,100 Employees, 20% of Its Workforce
The San Francisco web performance and cybersecurity company announced the cuts, representing 20% of its staff, on the same day it reported first-quarter revenue of $639.8 million. Co-founders Matthew Prince and Michelle Zatlyn cited fundamental changes in how the company operates as it becomes its own most demanding AI customer. The move is part of a broader wave of U.S.
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Cloudflare is laying off 1,100 people, representing 20% of its staff, the latest in a series of major technology-sector cuts driven by rapid adoption of artificial intelligence tools. The San Francisco web performance and cybersecurity company announced the job cuts on the same day it reported its first-quarter earnings. 8 million in the first quarter.
9 million. The company projected revenue of $664 million to $665 million for the second quarter, below the $666 million Wall Street anticipated. Cloudflare’s stock dropped around 18% in after-hours trading after the announcement.
Matthew Prince, co-founder and chief executive, and Michelle Zatlyn, co-founder and president, told employees in an e-mail that the way the company works has changed. “The way we work at Cloudflare has changed. We don’t just build and sell AI tools and platforms.
We are our own most demanding customer,” they said. Cloudflare’s use of AI has jumped more than 600% in the last three months. Employees in engineering, HR, finance and marketing are running thousands of AI agent sessions each day.
Cloudflare executives stated that they are making these changes now because making smaller, repeated cuts or dragging a reorganization out over multiple quarters creates prolonged emotional uncertainty for employees and stalls the ability to build. The company estimates that severance and other restructuring will cost between $140 million and $150 million for 2026.
As of December, Cloudflare had 5,156 employees.
