Cloudflare to Cut About 1,100 Jobs as Part of AI-Driven Restructuring

Cloudflare is laying off more than 1,100 employees, the internet security and cloud networking firm revealed on Thursday. The cuts amount to roughly one-fifth of Cloudflare’s global workforce. The company had 5,156 full-time employees at the end of 2025.

Co-founders Matthew Prince and Michelle Zatlyn told employees in an internal memo that the way we work at Cloudflare has changed. They said the company’s internal use of artificial intelligence has exploded more than 600% in just three months. Workers across engineering, HR, finance, and marketing now run thousands of AI agent sessions each day.

“We don’t just build and sell AI tools and platforms. We are our own most demanding customer,” Prince and Zatlyn wrote. ” Cloudflare insisted the layoffs were not a cost-cutting exercise or a reflection of employee performance.

The restructuring is part of a sweeping effort to reimagine every internal process, team, and role across the company. The company, founded in 2009, described the move as a one-time, decisive reset designed to avoid smaller, repeated cuts. All employees would be notified directly by email within an hour rather than through managers.

“We’ve asked the team to do this only once,” the founders stated. The restructuring should be substantially complete by the end of the third quarter. Departing workers are offered full base pay through the end of 2026.

They will also receive continued US health care coverage through year’s end and equity vesting through Aug. 15. 8 million, a 34% increase from a year earlier.

The company expects to take on $140 million to $150 million in restructuring-related charges. Most restructuring expenses will land in the second quarter. New York Post reported the details of the severance packages and the internal AI usage surge.

Matthew Prince and Michelle Zatlyn stated that we have to be intentional in how we architect our company for the agentic AI era. The founders said the restructuring is not tied to individual employee performance but to a broader shift toward operating as its own most demanding AI customer.