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Cloudflare Cuts 1,100 Jobs, About 20% of Workforce, in First Mass Layoff
Cloudflare announced its first mass layoff on Thursday, cutting about 20% of its workforce even as it reported record quarterly revenue of $639.8 million. CEO Matthew Prince attributed the cuts to massive productivity gains from AI adoption that began tipping internally last November. The company ended the quarter with about 5,500 employees before the reductions.
May 8, 2:33 PM·1m read2 sources
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Cloudflare laid off more than 1,100 employees on Thursday in the first mass layoff in its 16-year history. The cuts represented about 20% of the company's staff and affected all teams and geographies except salespeople who carry revenue quotas. 8 million, a 34% year-over-year increase.
2 million in the year-ago quarter. It ended the first quarter before layoffs with a headcount of about 5,500. 5 billion in remaining performance obligations, which grew 34% year-over-year.
"We’ve never done something like this in Cloudflare’s history," Matthew Prince said on the quarterly conference call. " The internal tipping point for AI adoption at Cloudflare was last November. Some team members became "two, 10, even 100 times more productive" after adopting AI, Prince said.
Cloudflare’s usage of AI has increased by more than 600% in the last three months alone. Virtually the entire R&D team at Cloudflare is now using the company’s own Workers platform including its vibe coding feature. One hundred percent of the code produced using Cloudflare’s Workers platform and deployed for use in Cloudflare’s products is now reviewed by autonomous AI agents.
Employees across Cloudflare from engineering to HR to finance to marketing run thousands of AI agent sessions each day. Prince acknowledged the company had been cautious about adopting AI internally even while selling AI-powered products. The surge in internal use has reduced the need for certain support roles.
"A lot of the support people that provide support behind them, those roles aren’t going to be the roles that drive companies going forward," he said. Prince said the company will continue to hire and invest because employees embracing AI tools have become far more productive. "I would guess that in 2027 we’ll have more employees than we did at any point in 2026," he said.
