Cloudflare, a US-based internet infrastructure and cybersecurity company, is cutting 20% of its workforce, affecting more than 1,100 employees globally. Artificial intelligence (AI) has “radically changed” the way it works, enabling small teams to handle tasks that previously required much larger workforces, the company revealed in a blog post.
“This was not an easy decision, but it is the right one,” CEO Matthew Prince said during the earnings call. According to him, some current jobs may not fit the type of work Cloudflare expects to prioritize moving forward. He also stressed that the company’s use of AI has grown by 600% in the past three months, and described the transformation as an “AI-first operating model.”
The company also stressed that the layoffs were driven by organizational and operational restructuring, and not by poor employee performance or temporary budget constraints.
At the end of 2025, the company had 5,156 full-time employees, so the cuts will affect nearly a fifth of its workforce. Additionally, it expects to spend between $140 million and $150 million in severance pay in the second quarter.
In the first quarter, Cloudflare beat Wall Street expectations, posting revenue of $639.8 million versus expectations of $621.9 million. Its adjusted earnings were higher than expected at 25 cents per share. So, despite making profits, the company decided to reduce its workforce as artificial intelligence changes its operations.
Tech layoffs continue in May, with Cognizant also reportedly cutting more than 15,000 jobs as part of a restructuring. Meta also confirmed layoffs that could affect approximately 8,000 employees in the United States.
