Cloudflare To Cut 20% Workforce Amid AI-Led Restructuring
Cloudflare said on Thursday that it will cut around 20% of its global workforce as the cybersecurity and internet infrastructure company restructures operations around the rapid adoption of artificial intelligence tools.
The San Francisco-based company plans to eliminate more than 1,100 jobs worldwide. Cloudflare employed 5,156 full-time workers at the end of 2025.
The company expects to record restructuring charges of between $140 million and $150 million during the second quarter as part of the workforce reduction.
Revenue Forecast Falls Slightly Short
Cloudflare forecast second-quarter revenue between $664 million and $665 million, slightly below Wall Street estimates of $665.3 million, according to LSEG data.
The company projected adjusted earnings of 27 cents per share, matching analyst expectations.
Despite reporting stronger-than-expected first-quarter financial results, Cloudflare shares fell nearly 19% in extended trading following the announcement.
During the first quarter, the company posted revenue of $639.8 million, exceeding analyst expectations of $621.9 million. Adjusted earnings came in at 25 cents per share, above forecasts of 23 cents per share.
Cloudflare shares have still gained more than 30% so far this year.
Company Shifts To “Agentic AI” Model
Cloudflare Chief Executive Officer Matthew Prince and co-founder Michelle Zatlyn told employees the company was redesigning operations for what they described as an “agentic AI-first operating model”.
The company said the job cuts were linked to a broad overhaul of workflows, processes and team structures rather than employee performance or short-term financial pressure.
Cloudflare also revealed that its internal use of artificial intelligence tools has increased more than sixfold over the past three months, driving major operational changes across departments.
AI Automation Fuels Wider Industry Concerns
The announcement adds to growing concerns among economists and investors that AI-driven automation could accelerate job losses across industries vulnerable to technological disruption.
Several technology and financial companies have already begun restructuring operations around artificial intelligence adoption.
Earlier this year, payments company Block announced plans to cut more than 4,000 jobs, representing nearly half of its workforce, as part of a wider AI-focused reorganisation strategy.
Meanwhile, Goldman Sachs economists estimated that artificial intelligence contributed to between 5,000 and 10,000 monthly net job losses during 2025 across the most automation-exposed industries in the United States.
The rapid integration of AI systems continues to reshape how companies manage operations, staffing and productivity across the technology sector.
With inputs from Reuters