Cloudflare slashes 20% of jobs as AI reshapes its workforce
Cloudflare has announced plans to cut around 20% of its workforce, affecting roughly 1,100 employees. The decision follows a major shift toward artificial intelligence tools across the company. Management cited rapid AI adoption as the key reason for restructuring teams and roles. The company’s revenue rose by 33% in the first quarter of 2026, reaching $640 million. Despite this growth, net losses shrank to $22.9 million, an improvement from $38.5 million in the same period last year. However, the cost of layoffs is expected to total between $140 million and $150 million, mostly due to severance, benefits, and related expenses.
AI usage at Cloudflare has surged by over 600% in the past three months. Employees in engineering, HR, finance, and marketing now depend on AI agents for daily tasks. As a result, the company plans to reassess team structures and job functions to align with its expanded AI integration. Most of the layoff-related expenses will appear in the second quarter of 2026. Each affected employee will receive an individual notification outlining their future with the company.
The restructuring will reduce Cloudflare’s workforce by a fifth. The move reflects the company’s growing reliance on AI to streamline operations. Financial impacts from the layoffs will become clearer in the coming months.
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