Cloudflare has announced plans to cut approximately 1,100 jobs even as the internet infrastructure company reported the highest quarterly revenue in its history.
The company, which provides cybersecurity and web performance services for millions of websites globally, said the reductions would affect employees across most departments and regions. The layoffs were disclosed on May 7 in a joint blog post by Cloudflare co-founder and chief executive Matthew Prince and co-founder, president and chief operating officer Michelle Zatlyn.
In the statement, the executives said, “The way we work at Cloudflare has fundamentally changed. We don’t just build and sell AI tools and platforms. We are our own most demanding customer. Cloudflare’s usage of AI has increased by more than 600% in the last three months alone.”
“Employees across the company, from engineering to HR to finance to marketing, run thousands of AI agent sessions each day to get their work done. That means we have to be intentional in how we architect our company for the agentic AI era in order to supercharge the value we deliver to our customers and to honour our mission to help build a better Internet for everyone, everywhere,” they added.
In Cloudflare’s Q1 earnings call for fiscal year 2026, Prince indicated that the company expected to continue hiring in the future, arguing that workers able to use AI systems effectively were becoming significantly more productive.
“I think that we will continue to hire people, and we'll continue to invest in them because the people that are embracing these tools are just so much more productive than we'd ever seen before. I would guess that in 2027 we'll have more employees than we did, you know, at any point in 2026,” he said.
Cloudflare reported quarterly revenue of $639.8 million, up 34% from the same period a year earlier. Despite the revenue growth, the company posted a net loss of $62 million, wider than the $53.2 million loss recorded during the same quarter last year.
Cloudflare joins a growing number of technology companies reporting strong revenue growth while simultaneously reducing headcount and attributing the restructuring partly to advances in AI. Major firms including Meta, Microsoft, and Amazon have also linked organisational restructuring to increasing automation and AI-driven productivity gains.
