Cloudflare has laid off more than 1,100 employees globally, representing nearly 20% of its workforce, as the company restructures operations around artificial intelligence and automation. According to reports, the move comes as Cloudflare shifts towards what CEO Matthew Prince described as the ‘agentic AI era,’ despite the company continuing to report revenue growth and expanding customer adoption.
The layoffs were announced shortly after the company reported first quarter earnings and projected second quarter revenue slightly below Wall Street expectations. In a memo sent to employees, Prince and co-founder Michelle Zatlyn said Cloudflare’s internal use of AI tools has increased more than sixfold in the last three months, with teams across engineering, finance, HR and marketing using AI agents daily to complete work and automate processes.
According to the company, the restructuring is not being positioned as a response to financial stress or poor business performance. The leadership memo stated that the layoffs are part of a broader effort to redesign internal teams, workflows and operational structures to align with an AI-first model focused on speed, efficiency and scalability.
Prince also addressed the layoffs separately in a reported opinion piece, where he argued that AI is fundamentally reshaping how modern companies operate. Reports noted that he categorised organisational functions into builders, sellers and measurers, while suggesting that AI automation is increasingly reducing the need for several middle management and operational roles.
The development reflects a wider shift taking place across the technology sector as companies accelerate investments in generative AI while reassessing workforce structures. Industry reports have increasingly linked recent layoffs across global technology companies to AI led productivity gains, automation and changing operational priorities.
Cloudflare said affected employees will receive severance support, healthcare continuation and extended equity vesting as part of the transition process. The company currently operates across internet infrastructure, cybersecurity and cloud services markets, serving businesses globally through its connectivity and AI-enabled network products.
